Planning for retirement is too often something Americans do way too late. This causes many people financial distress in their later years. Ideally, financial planning for retirement would begin when a person lands their first full-time job. This happens in the late teens or early 20’s for most people. Unfortunately, at that young age, retirement seems like a problem in the distant future, so many people don’t assess their retirement needs until late into their adult years. When you approach your 50’s, you should start looking into your options, needs, and important deadlines for getting into programs you may be eligible to participate in. This guide will take you through the most important retirement dates to know—although retirement is a personal decision, it depends significantly on governmental regulations and rules.
First important retirement milestone: Age 59 and a half
Your first major retirement milestone comes on your half-birthday when you’re 59. At 59 and a half, you can start withdrawing from your retirement accounts without a penalty. You are technically allowed to take money from your accounts prior to age 59 and a half, but there is a 10 percent early withdrawal penalty for doing so. This year is the first one where you won’t be penalized for removing funds.
Tip: Hold off on taking from your retirement accounts for as long as possible. The longer the money remains in the fund, the more it will grow, and your retirement fund will last longer.
Don’t miss the Social Security sign up: Age 62
When you turn 62, you can sign up for Social Security and start receiving payments. You will not receive full payments until you turn 67, but until that point, you can opt to receive payments at 70 percent of your full retirement amount.
Tip: You don’t have to sign up to receive Social Security at age 62. If possible, wait until your full retirement age to sign up so your checks are at their full amount and last longer.
Enrollment eligibility for Medicare begins: Age 65
Medicare is tricky, as it has deadlines to sign up by to avoid penalty fees, ineligibility, and additional costs. Many people who retire assume they’ll automatically enroll in Medicare, but that is one of many common misconceptions about Medicare that people hold. If you miss your enrollment deadline, you’ll suffer the penalty of 10 percent of your monthly premium—regardless of if you missed the enrollment period by a month or a year.
Full retirement kicks in: Age 67
For everyone born after 1960, the full retirement age is 67. This is when your full eligibility kicks in for Social Security benefits. This means you’ll begin to receive payments that are 100 percent of your Social Security benefit.
Make sure you take full advantage of these programs and other that will help you pay for your retirement living and care in your senior years.