What To Do At Each Step

When it comes to retirement planning, there are a few milestone ages that stand out as crucial. These moments are your financial checkpoints—opportunities to make adjustments, reap benefits, or avoid costly mistakes. Understanding what to do at each of these ages can make your retirement journey smoother and more rewarding.

Here’s a breakdown of the key milestone ages in retirement and what actions to take at each one.

Age 50: The Catch-Up Contribution

If you’re 50 or older, you can start making catch-up contributions to certain retirement accounts. This means you can contribute an additional $7,500 to a 401(k) (as of 2025) and $1,000 more to an IRA each year.

What to Do:

• Maximize savings: If possible, take advantage of these higher limits to supercharge your retirement accounts.
• Review your goals: Evaluate where you are in your savings journey and adjust your contributions to meet your target.

Age 59½: Penalty-Free Withdrawals

This is when you can begin withdrawing from traditional IRAs, 401(k)s, and other tax-deferred accounts without incurring the 10% early withdrawal penalty.

What to Do:

• Assess your needs: If you’re still working, it may make sense to leave your money growing. If you’re retired, this is a good time to create a withdrawal strategy.
• Plan for taxes: Withdrawals from tax-deferred accounts are subject to ordinary income tax, so strategize to minimize your tax bill.

Age 62: Social Security Eligibility

At 62, you can start claiming Social Security benefits. However, keep in mind that taking benefits early means a permanent reduction in your monthly check.

What to Do:

• Evaluate your options: Consider the impact of claiming now versus waiting. For example, your benefits increase by about 8% for every year you delay past your full retirement age (FRA).
• Understand spousal benefits: If you’re married, factor in how your claiming strategy will affect your spouse’s benefits.

Age 65: Medicare Enrollment

Your initial enrollment period for Medicare begins three months before your 65th birthday and ends three months after. Missing this window can lead to higher premiums later.

What to Do:

• Enroll on time: Even if you’re still working and have health insurance, it’s often wise to enroll in at least Medicare Part A (hospital insurance).
• Review supplemental coverage: Consider whether you need additional coverage, such as Medigap or a Medicare Advantage plan.

Age 66–67: Full Retirement Age (FRA)

Depending on the year you were born, your full retirement age for Social Security falls between 66 and 67. At this point, you’re eligible for your full benefit amount.

What to Do:

• Consider waiting: If you can afford to wait, delaying benefits until age 70 can maximize your payout.
• Claim if it’s right for you: If you’ve stopped working and need the income, this is the time to claim.

Age 70: Maximize Social Security

If you haven’t already started Social Security, age 70 is the latest you can delay. Waiting this long ensures you receive the largest possible monthly benefit.

What to Do:

• Claim Social Security: Delaying past age 70 doesn’t increase your benefit, so don’t leave money on the table.

Age 73: Required Minimum Distributions (RMDs)

Once you turn 73 (or 75 for some individuals starting in 2033), you must begin taking RMDs from most retirement accounts, like traditional IRAs and 401(k)s.

What to Do:

• Calculate your RMDs: The IRS provides a formula based on your account balance and life expectancy.
• Plan withdrawals strategically: Incorporate RMDs into your income plan to avoid large tax bills.

Beyond 73: Stay Flexible

Retirement doesn’t end with the milestones listed above. It’s an ongoing process of managing your finances, adapting to changes, and enjoying life.

What to Do:

• Review annually: Make it a habit to reassess your budget, investments, and health care needs each year.
• Update your estate plan: Ensure your will, beneficiaries, and other estate documents reflect your current wishes.

Final Thoughts

Retirement is a journey, not a destination. By understanding these key milestone ages and taking action when you hit them, you can stay on track and make the most of your hard-earned retirement savings.

If you have questions or want personalized advice on your retirement plan, reach out to a financial professional. The earlier you plan, the better prepared you’ll be to enjoy the retirement you deserve.

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