The Most Important Birthdays of Your Life

When you think of important birthdays, what comes to your mind? We’re guessing 16, when you can get your driver’s license, 18, when you’re legally an adult, and  21, when you can legally drink. While those are definitely milestone years, in our opinion, the most important birthdays of your life happen once you’re “over the hill.”

Your 50th Birthday

At 50, you can take penalty-free withdrawals from a qualified employer retirement plan as long as you’re a qualified public safety employee and your employment ends during or after the year you turn 50. Usually, you’d incur a 10% early distribution penalty if you withdraw from an employer retirement plan before you turned 59 ½.

Your 55th Birthday

If you’re not a qualified public safety employee, once your turn 55, you can take penalty-free withdrawals as long as your employment ends during or after the year you turn 55.

Your 59th ½ Birthday

Once you reach 59 ½, you can take penalty-free withdrawals from any qualified retirement plan or IRA, regardless of whether or not you’re still employed. Regular income taxes usually apply to these distributions instead.

Your 62nd Birthday

At 62, you’re eligible to start collecting Social Security benefits. However, since you’re not yet at the “full retirement age” of 66-67, your benefit will be reduced by up to 30%

Your 65th Birthday

Now is when you’re able to enroll in Medicare. While Medicare Part A coverage is automatic for those eligible for Social Security, you’ll need to apply for the voluntary Part B coverage, which requires you to pay a monthly premium. To get the coverage as early as possible, apply two to three months before you turn 65.

Your 70th ½ Birthday

This is the age when you are required to take minimum distributions from most tax-deferred retirement plans — otherwise, you’ll face a 50% penalty on the amount you should have taken. The amount you take is dictated by life expectancies determined by the federal government.

At American Investment Planners LLC, we make it a priority to help you prepare for the best financial future possible. From managing your cash to retirement planning, we’re here to help with anything you may need. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.