There are some ages that are notable in life – from the age you can first legally vote, to the age you can legally drink. In the world of finance, there are notable ages as well that correspond to your financial life, and it starts as soon as you become an adult.
It doesn’t matter if you’re just starting out, or near retirement age, MRA Advisory can help you craft a plan to get the most out of retirement. Schedule a complimentary first meeting with one of our advisors today.
Eighteen
It depends on your state (and the type of account) but in many states, by 18 you’re no longer considered a minor. The implication of this financially is that if you have accounts like UGMA or UTMA these dollars are no longer restricted and your child (who is no longer a child at this point) has free access to these funds. At age 18, you also stop collecting any child survivor Social Security benefits for deceased parents if you had those benefits.
Twenty-Six
At the age of 26, you can no longer stay on your parent’s health insurance policy and need to be on your own policy – regardless of your employment status. If you don’t have an employer sponsored plan for yourself, you can obtain health coverage through Marketplace.
Fifty
Fifty is the next notable age in your life, as this is when you can begin with catch-up contributions for your retirement accounts. If you have an IRA, you can save an extra $1,000. If you have a plan such as a 401(k) or 403(b) then you can save an additional $7,500 the year that you turn 50. These amounts are in addition to the normal limits on your retirement plan.
Fifty-Five
When you reach the age of 55, you can begin catch up contributions to your health savings account or HSA. Unlike your retirement plan, where you can start the year that you turn 50, for your HSA you need to wait until the date you turn 55 to start saving those additional funds. You can save an additional $1,000 to your plan if you have a family plan.
Fifty-Nine And A Half
You’ve reached the age of penalty-free retirement withdrawals! This is the magical time when you can access those retirement accounts without the 10% early withdrawal penalty. You’ll still be subject to any income tax on that money, but at least once you’re 59.5 you won’t have to deal with the 10% fee on top of it.
Sixty
At sixty, you can collect Social Security Survivor benefits. It’s important to fully understand the benefits and tradeoffs of these benefits before you begin collecting them, as it may depend on your situation – but it may make sense to take them now or in some cases to wait.
Sixty-Two
At 62 years old, you’re Social Security eligible at a reduced rate. While you can begin collecting your benefits now, you may be subject to a 70% reduction on your benefits for life. This is something that you should weigh out the pros and cons of against your financial situation, and it may help to talk through it with a financial planner. It’s important to understand though that this is the age where you can being to take these benefits.
Sixty-Five
Now you’re eligible for Medicare. Even if you’re currently on an employer sponsored health plan, you may want to discuss your options with a Medicare specialist to see what may be the best fit and so that you don’t jeopardize your benefits. Medicare tends to be a cost savings for most, so start looking at it about three months before you turn 65.
Sixty-Seven
By age 67, you’re the Full Retirement Age for Social Security – if you’re born in 1960 or later as of this writing. Once you reach Full Retirement Age, you obtain 100% of your Social Security Benefits.
A quick note, if you are born in 1954 or prior, your FRA is 66, in 1955, 66 and 2 months, in 1956, 66 and 4 months, in 1957, 66 and 6 months, in 1958, 66 and 8 months, and in 1959, 66 and 10 months.
Seventy
By 70, you’re at the maximum for your Social Security benefit. By this age, if you’ve waiting to collect Social Security, now is the time, as the benefits have reached their maximum and can’t grow any higher.
Seventy-Three (Or Seventy-Five)
If you were born before 1951-1959, 73 is the age where you’ll have to start taking Required Minimum Distributions. If you were born in 1960 or later, that age will be 75 for you.
Advisory Services are offered through MRA Advisory Group, a Registered Investment Adviser. It is general in nature that the statements herein are not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. The investments and strategies mentioned may not be suitable for all investors. Past performance is no guarantee of future results. Nothing herein, nor any attachment, shall be considered to constitute (i) an offer to sell, nor a solicitation of an offer to purchase, any security, or (ii) tax or legal advice.