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10 Key Ages to Know for Your Best Retirement

| February 17, 2021

Beginning at the age of 50 and going until the age of 72, there is a timeline of many key ages for retirement planning opportunities. Decisions to be made in this window, to name a few, include turning on Medicare, beginning Social Security benefits, reviewing to see if any earnings will reduce benefits, which retirement accounts to take money from, and how much in taxes will be owed. Choosing the right options during this period are vitally important to maximize retirement cash flow and/or can save a large amount of money on taxes. So let’s start from the earliest-


Retirement Planning Opportunity Ages

1/2. Age 50 & 55

  • To start taking money out of your retirement accounts, most people think they need to wait until they’re over the age of 59.5 to avoid the 10% penalty tax. However, age 55 is actually the earliest age to withdraw from a 401(k) or 403b and not be subject to the 10% penalty tax. A couple stipulations apply, one being this only pertains to your funds in the employer plan you just retired from, and that you retire no earlier than the year you turn 55.
  • In some instances, this allowance mentioned above may also apply to public safety workers such as police officers or fireman starting at age 50.

3. Age 59.5

  • This is the age you can withdraw from any type of retirement accounts, such as a 401(k), 403b, Traditional IRA, etc., and not incur the 10% penalty tax. Two things to note:
    • You still pay ordinary income tax.
    • If you are still working, your employer may restrict access to withdrawals from the employer plan.

4. Age 60

  • If you are a widow/widower, this is the earliest you would be eligible for Social Security survivor benefit. Depending on your specific situation, it may make sense to hold off starting right away if you are still working because the benefit can be reduced if you make too much money. However, if you are retired, you could collect your survivor benefit, while allowing your own Social Security benefit to grow until age 70!

5. Age 62

  • This is the earliest age you can claim your own Social Security benefit. But like mentioned above, it may be reduced if you are still working. In addition, the total benefit amount you receive at 62 is significantly less than waiting until your Full Retirement Age. Typically, it does not make sense to claim your own benefit at 62 if you are continuing to work.

6. Age 63

  • Even though Medicare does not begin until you reach age 65, this year is important because it is used to calculate your Medicare premiums for Part B and Part D. Medicare premiums are determined by looking at your tax returns from two years ago. But keep in mind you can request a reconsideration for a few reasons, one being you just retired to adjust your premium amount.

 7. Age 65

  • Medicare eligibility begins here, and you are allowed to enroll in Part A and Part B. However, if you are still working at a larger company (20 or more employees), you don’t have to sign up for Medicare Part B and can keep your employer coverage as primary until you retire.

 8. Age 66 – 67

  • Specifically, your full retirement age for Social Security, which falls somewhere between the ages of 66 or 67 based on your date of birth. At your full retirement age, the earnings limit no longer applies. You can continue to work, and it will not decrease your Social Security benefit.

 9. Age 70

  • This is the latest your Social Security benefit will continue to increase if you delay turning them on. For many high-income earners, it often makes sense for the highest earner to wait as long as they can to start Social Security benefits. Not only will it maximize their own benefit, but it will also maximize the survivor benefit.

 10. Age 72

  • The IRS says at 72 you are required to withdrawal a certain amount from your retirement accounts, even if you do not need the income. They call this Required Minimum Distributions, also known as RMDs. This unnecessary income can raise your tax bill unexpectantly because it may be pre-tax money. In addition, this may now have any Social Security benefits taxable that may not have been taxable before. Plan ahead for this!



Throughout all the different ages mentioned above, there are many planning opportunities available, specifically focused on tax planning. When there is a year of low income, a few ideas present themselves. One can take advantage of realizing long term capital gains at the 0% bracket. Or perhaps it is a good year to convert any pre-tax IRA money to a Roth IRA, since you are in a lower tax bracket now and save taxes over the life of your retirement. It is important to remember your options during these retirement years as they have a significant impact to help put more money in your pocket, less to Uncle Sam, and more for your legacy.


This information in this material is for general information only and is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.