Retirement Planning

During various stages of our lives, there are key ages/milestones to keep in mind for financial-planning purposes.  We have put together the time table below to track several of these life-events that we plan for and incorporate into each of our clients’ financial plans:

Age 18 – Legal age of an adult.   Ownership of a Unified Gift/Transfer to Minor Account (UGMA/UTMAs) can be transferred to the individual previously listed as the minor on the account.  They are now able to fully control the account and make all financial-related decisions regarding the funds.

Age 26 – Independent Medical Insurance. Individuals under the age of 26 are eligible to remain on their parents’ health insurance plan.  Prior to reaching your 26 ^th birthday, you’ll need to have a new plan in place to ensure continued coverage.

Age 50 – Catch-up provision for 401ks and IRAs begin.   Instead of the previous annual contribution limit, you can contribute more to your IRAs and 401(k).  Click here for the details.  This is a great way to “catch up” on making additional contributions to your retirement accounts before reaching your target retirement age.

Age 59 1/2 – Access to IRA funds become available .  Prior to age 59 1/2, if you were to pull funds out of an IRA for reasons other than a first-time home purchase, qualified medical expenses, or education expenses, you would likely have incurred a 10% early withdrawal penalty.  You will still be required to pay taxes on withdrawals from traditional IRA funds, but no penalties will be incurred.  Learn more here.

Age 62-70 – Availability of Social Security Benefits .  Depending on your date of birth, you’ll be eligible to start drawing on your social security benefits between ages 62-70.  There are a lot of factors to consider when choosing your social security start date, such as life expectancy and current employment status.  Let us help you evaluate your choices so you can  map out a solution that best meets your goals and needs.

Age 65 – Medicare Insurance Becomes Available.   Upon reaching age 65, most individuals are automatically enrolled in Medicare Part A if they have worked at least 10 years under employment where Medicare taxes were being paid.  Medicare Part B and Part D are available for additional premiums as well.  We offer medicare services.

Age 70 1/2 – Required Minimum Distributions (RMDs) begin.   If you have a traditional IRA, you are required to begin drawing annually from these accounts after age 70 1/2. You’ll need to withdraw the funds from your account each year by December 31 ^st , but you have until April 1 ^st of the year after reaching age 70 1/2 to take your first withdrawal.  RMDs don’t apply to ROTH IRAs, so no need to begin pulling money from those if you hadn’t already planned to!  We work with our clients to recommend the best withdraw strategy.

Prior to reaching many of these key ages, there are several financial-planning checklist items that we also find helpful to consider: