Retirement Ready. Key Money Moves in Your 50s, 60s and Beyond.
Birthdays are a time to celebrate, but they can also be a good opportunity to reflect on your financial health and make plans for the future. Here are some key financial planning milestones to consider at different stages of life.
Before Age 18
Birth. You can name a child as the beneficiary of a 529 plan account or Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) accounts to give them a head start on saving for college or other future expenses.
Age 13. Your child is no longer eligible for the Child and Dependent Care Credit, so you may need to adjust your tax withholding or filing.
Age 17. Your child is no longer eligible for the Child Tax Credit.
Age 18. In most states, this is the age of majority, meaning your child is legally an adult (terminating some UGMA and UTMA accounts) and can make their own financial decisions. Furthermore, your child is no longer subject to Kiddie Tax (unless they’re a full-time student).
In Your 20s
Age 21. This is the age of majority in some states. It is also a good time to talk to your kids about budgeting, saving, and investing.
Age 24. If your child is a full-time student, they are no longer subject to the Kiddie Tax on their investment income.
Age 26. Adult children may lose their parents' health insurance coverage under the Affordable Care Act.
In Your 50s
Age 50. You can now make catch-up contributions to your retirement accounts (Individual Retirement Accounts, 401(k), 403(b), 457 plan), allowing you to save more money each year. Disabled widows and widowers are eligible for Social Security benefits.
Age 55. You are eligible to make catch-up contributions to your Health Savings Account (HSA). If you leave your job after age 55, you can utilize the Rule of 55 to make penalty-free withdrawals (avoiding the 10% early withdrawal penalty) from your employer’s retirement plan.
Age 59 ½. You can withdraw money from your Individual Retirement Accounts (IRA) without paying a 10% early withdrawal penalty. You will still owe income taxes on withdrawals from pre-tax retirement accounts, but qualified withdrawals from Roth IRAs are tax-free.
In Your 60s
Age 60. You may be eligible for Social Security survivor benefits as a widow or widower (early and at a reduced rate).
Age 62. You can start claiming Social Security retirement benefits (early and at a reduced rate). You may also be eligible to qualify for a reverse mortgage.
Age 64 + 9 months. This is the start of the Initial Enrollment Period for Medicare.
Age 65. You are eligible for Medicare coverage. You are also eligible for penalty-free non-medical withdrawals from your Health Savings Account - withdrawals for qualified medical expenses are always tax and penalty-free.
Age 66 (or later). This is the Full Retirement Age for Social Security if you were born between 1943 and 1954.
Age 64 + 2 months. Full retirement age if born in 1955.
Age 64 + 4 months. Full retirement age if born in 1956.
Age 64 + 6 months. Full retirement age if born in 1957.
Age 64 + 8 months. Full retirement age if born in 1958.
Age 64 + 10 months. Full retirement age if born in 1959.
Age 67. Full retirement age if born in 1960 or later.
In Your 70s
Age 70. You have reached the maximum Social Security benefit amount.
Age 70 1/2. You are eligible to make Qualified Charitable Distributions (QCDs) from Individual Retirement Accounts (IRA) without paying taxes on the earnings.
Age 73. Required Minimum Distribution Age if born before 1960.
Age 75. Required Minimum Distribution Age if born in 1960 or later.
Conclusion
These are just a few of the financial planning milestones to keep in mind. It's important to review your financial situation regularly and make adjustments to your plans as needed. A financial advisor can help you create a personalized plan to meet your financial goals.
Here are some additional tips for financial planning around milestone birthdays:
Set financial goals. What do you want to achieve in the short term, and long term? Once you know your goals, you can start to develop a plan to reach them.
Track your spending. Knowing where your money is going is essential for making smart financial decisions.
Save regularly. Even if it's just a small amount, make sure you're saving something for the future.
Invest for the long term. The stock market can be volatile in the short term, but it has historically provided a good return on investment over the long term.
Get professional help. A financial advisor can help you create a personalized plan to meet your financial goals.
By taking the time to plan for your financial future, you can help ensure that you have a secure and comfortable retirement.
To your Atomic Retirement,
Ryan Kilkenny
P.S. If you have a question or would like help planning for retirement, you can schedule an appointment here.
