This is the age at which one can withdraw money from traditional IRAs, 401(k)s or similar retirement plans without restrictions and without an added 10% tax penalty. Withdrawals will still be taxed at normal tax rates. For most people, it is not wise to begin drawing funds from retirement accounts at this relatively young age unless they have specific financial needs. Usually, the value of maintaining tax-preferred savings exceeds the benefit that may come from early spending.
This is the first year to collect a Social Security survivor benefit if a spouse or ex-spouse (if they were married for at least 10 years and never remarried) has died.
The earliest age that someone could collect Social Security retirement benefit. Most people should not file for benefits at this early age although certain spousal strategies may be an exception. This is also the age at which pensions from long-term employers may begin.
Not an official milestone, but can be an important age for laid-off workers who are offered COBRA health care benefits. COBRA benefits typically last for 18 months and 65 is the age at which one can begin Medicare medical coverage. Therefore, 63 and a half is the earliest age at which, if a person was laid off and covered by COBRA health care benefits, that COBRA benefits would provide a health care bridge all the way until they are eligible for Medicare.
Medicare eligibility age. Most people should sign up for Medicare benefits within a 7 month time period around this birthday to avoid lifetime surcharges on Medicare benefits. There are a few exceptions to this requirement, including active employees who are still covered under an employer health plan.
Sixty-six is the ‘magic age’ for Social Security, when many options become available. For most baby boomers, 66 is the official full retirement age . At this age a number of creative Social Security strategies for couples become available, including File and Suspend and Restricted Filing. If a Social Security claim has already been filed, 66 is the first age at which one can suspend benefits in order to allow delayed retirement credits to build up.
This is the age at which there is no additional benefit to delay filing for Social Security benefits. People who are able to delay filing until the age of 70 have maximized their lifetime monthly Social Security benefit. They should file immediately, as there is no benefit to waiting any longer.
Owners of retirement accounts such as IRAs, 401(k)s or other similar retirement plans are required to start taking specified required minimal distributions (RMDs) from these accounts when they turn seventy and a half. They actually have until the following April to make take the first year distribution. After that, each year’s distribution must be taken by Dec. 31 of that year. The total required distribution is based on the total values of all of a person’s IRAs and retirement plans as of Dec. 31st of the previous year. The total distribution may all be taken out of any one account or may be split among the accounts as needed,
Deciding when you or your spouse will start taking Social Security benefits may be the most important decision of your retirement. Your choice can have a tremendous impact on the total amount of benefits you stand to receive over your lifetime.
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