How many times have you celebrated your 29th or 39th birthday? We often make fun of ourselves about aging, and sometimes it’s easy to think that none of your birthdays really matter after you’re 21, but there are some reasons to celebrate some of your older birthdays – or at least pay attention to them! If you don’t, it could cost you.
Here is a list of some important birthdays, some that contain opportunities and some that contain pitfalls:
50 – If you are 50 or older, you are eligible to increase your contributions to your work retirement plans and IRA accounts. For 401k, 403b, and 457 plans, the maximum in 2018 if you’re under 50 is $18500, but once you’re over 50 that increases by $6000 to $24,500. For IRA contributions, the $5500 annual limit goes to $6500 once you’re over 50. For Simple Plans, the 2018 limit goes from $12,500 to $15,500.
55 – The 10% early withdrawal penalty on distributions from your 401k and 403b plan goes away if you’re out of work or want to retire early.
59 ½ - Withdrawals from all retirement accounts are penalty free (there are still taxes and if you’re still working you may not be able to make withdrawals from your employer’s plan)
62 – Earliest age to claim Social Security (doesn’t mean you should claim it yet, just that you can)
65 – Eligibility for Medicare
66 or 67 – Full retirement age (FRA), depending on your date of birth, is when your Social Security benefits are no longer reduced because of income. For your exact FRA, go to www.ssa.gov
70 – If you’ve waited to take Social Security, at age 70 is the maximum amount you’ll get.
70 ½ - You must take required minimum distributions (RMD) from IRA accounts and 401k/403b accounts
If you have any questions about what impact your birthday can have on your finances, feel free to email me at [email protected]