From the day we are born to the day we pass on, there are many important milestones in our financial lives that are triggered as we age. Here are some of the more important ages to keep in mind:
BIRTH: Welcome to the world! An infant can be named as a beneficiary in a 529 account or as the owner of a custodial savings or investment account.
Age 18: At age 18, a child is no longer subject to the Kiddie Tax, unless they are a full-time student.
Age 21: If you have a custodial account for your child, this is when your name as the custodian must come off and the child now has the right to manage and access the account. All grown up!
Age 24: A child who is a full-time student is no longer subject to the Kiddie Tax.
Age 26: Adult child may lose parent’s health insurance coverage under the Affordable Care Act.
Age 50: Congratulations! You are now eligible to make catch-up contributions to retirement accounts like your IRA, 401K, 403B, or 457 plans. Age 50 is also the age disabled widows/widowers are eligible for Social Security Benefits.
Age 55: You are now eligible for catch-up contributions to Health Savings Accounts, as well as eligible for penalty exceptions for certain withdrawals from retirement accounts.
Age 59 ½: What a milestone! After many years of saving, you are now eligible to withdraw from IRAs and possibly other retirement accounts without penalty.
Age 60: Survivors are eligible to claim
Social Security benefits as a widow/widower (early, at a reduced rate).
Age 62: Another noteworthy milestone! You are eligible to claim early Social Security benefits, which will be at a reduced rate. Many individuals choose to wait until their Full Retirement Age – between the ages 66-67 depending on your birthdate.
Age 65: Eligible for Medicare, assuming timely application. Age 64 and 9 months is the start of the Initial Enrollment Period for Medicare.
Age 66: If you were born between 1943 and 1956, this is the Full Retirement Age (FRA) for Social Security Benefits.
Age 66-67: For those born between 1955 and 1959, your FRA for Social Security Benefits is as follows, 1955 – Age 66 & 2 months, 1956 – Age 66 & 4 months, 1957 – Age 66 & 6 months, 1958 – Age 66 & 8 months, and 1959 – Age 66 & 10 months.
Age 67: For anyone born 1960 or later, this is your Full Retirement Age (FRA) for Social Security Benefits.
Age 70: If you haven’t started taking your Social Security benefits yet, now is the time! Age 70 is the age for your maximum benefit amount.
Age 70 ½: This used to be the important age in which Required Minimum Distributions (RMDs) from retirement accounts needed to begin. The law changed and for those who reach the age of 70 ½ on January 1, 2020 or after, the new RMD age is 72.
Age 72: For those born after July 1, 1949, age 72 is the age when Required Minimum Distributions (RMDs) begin.
I hope you enjoyed this quick trip through the ages! Should you have any questions or are looking for financial planning advice, investment services, or ways to save smarter for your retirement, don’t hesitate to contact our team at TrinityPoint Wealth. Wishing you peace and universal support in the days ahead, one day at a time. •
This material presented is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. TrinityPoint Wealth, nor its investment advisory representatives are permitted to provide legal or tax advice, and nothing contained in these materials should be taken as legal or tax advice. Source: Used with permission from fpPathfinder.com.
Dana R. Mascalo CFP®, RLP®, AAMS®, C(k)P® is a Managing Partner with TrinityPoint Wealth, an independent SEC Registered Investment Advisory firm in Milford, CT and Charlotte, NC. Dana advises high net worth clients with complex needs and is sought after by individuals, families, business owners and executives all over CT and the United States. Acting as their personal CFO, Dana looks at a client’s entire financial life with a visionary lens, advising on investment portfolios, retirement planning, stock options, life transitions, exit planning for business owners, customized advanced cash-flow planning and multi-generational wealth transfer strategies.