Age-Related Financial Planning Milestones Approach as People Enter Their Sixties
White Plains, NY (Law Firm Newswire) April 25, 2014 - As one nears retirement age, a number of important financial planning milestones begin to approach. It can be difficult to keep them all straight, so here is a timeline of what happens when.
At age 59 1/2, people can begin to make withdrawals from 401(k)s, traditional IRAs and similar retirement savings accounts, without an additional tax penalty of 10 percent. (Withdrawals are still taxed as income in any case.) Of course, just because one can begin to make withdrawals at this age does not mean one necessarily should.
At age 60, if one's spouse has died, then one can begin to collect a Social Security survivor benefit. This is also true if an ex-spouse has died, if the marriage lasted at least 10 years and the survivor did not remarry.
Upon reaching age 62, people can take the option of early Social Security retirement benefits. Keep in mind that starting one's benefits early results in lower payments, and it is usually better to wait a few years to receive a larger benefit. If one is eligible for a pension, these benefits also often kick in at this age.
At age 65, one becomes eligible for Medicare. There is a seven-month window around one's 65th birthday to sign up for Medicare benefits and avoid a surcharge.
Age 66, for most baby boomers, is full retirement age for the purposes of Social Security retirement benefits. Additionally, at this age, someone who chose early benefits can now suspend benefits in order to build up delayed retirement credits.
Upon reaching age 70, there is no further advantage to delaying taking Social Security retirement benefits. People who wait until this age to begin receiving benefits maximize their monthly payments.
At age 70 1/2, required minimum distributions begin for 401(k)s and IRAs. A certain amount must be withdrawn from these accounts each year, based on the total value of all such accounts.
By paying close attention to these milestones, one can complete a more precise budget, an important part of retirement planning.
New York Contact:
Maria M. Brill
Littman Krooks LLP
New York City Office
655 Third Avenue, 20th Floor
New York, New York 10017
(212) 490-2020 Phone
399 Knollwood Road
White Plains, New York 10603
(914) 684-2100 Phone
300 Westage Business Center Drive, Suite 400
Fishkill, NY 12524
(845) 896-1106 Phone
- Medicaid Asset Transfers: What Are The Rules?
For many families, paying for a loved one’s extended stay in a nursing home would be difficult without the help of Medicaid. However, in order to qualify for the program, a person’s income and assets must fall within certain limits. Federal rules state that to qualify for Medicaid nursing home coverage, a person must have […]
- Seniors & Mental Health: Is it Mental Illness or Aging?
Seniors are more at risk for mental illness than the general population. According to the Centers for Disease Control and Prevention (CDC), about 20 percent of people age 55 and older experience some kind of mental health concern. Not only are more seniors affected by mental illness, nearly one in three affected older adults does […]
- NYC Restores Assistance For Seniors and People with Disabilities
The New York City Department of Finance has agreed to a settlement that will reinstate or recalculate the previously frozen rent rates of widowed seniors who had been surprised by steep rent increases after the death of their spouses. A 2014 rule change by the New York City Department of Finance instituted a new requirement […]