The 23-Year Retirement Plan: Important Milestones to Secure Your Financial Future

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Saving for retirement is a crucial aspect of securing your financial future, and the earlier you start, the better. With the average retirement age increasing, it's essential to have a well-planned retirement strategy in place.

Here is a 23-Year retirement plan with essential milestones to ensure a comfortable retirement.

23-Year Retirement Plan

Age 49

Max out your retirement accounts

By the time you turn 49, make the most of your retirement accounts by contributing 100% of the contribution limit. This will help you accumulate savings faster and take advantage of tax benefits. When you turn 49, review your retirement savings goals and strategies.

Age 50

Catch-Up Contributions

At age 50, you can start making catch-up contributions to your retirement accounts. You can contribute up to $30,000 to 401(k), 403(b), and most 457 plans. This is an excellent opportunity to compensate for lost time if you have not saved enough for retirement.

Discounts

Many businesses offer senior discounts starting at the age of 50. Take advantage of these discounts on various products and services, such as travel, insurance, and healthcare, which can help you save some extra money for your retirement.

Age 55

The Rule of 55

The 'Rule of 55' allows you to withdraw from your 401(k) or 403(b) penalty-free if you leave your employer at or after age 55. This provides more flexibility in managing your finances.

Age 59 ½

End of 401(k) & IRA Penalties

At 59 ½, you become eligible to make penalty-free withdrawals from your 401(k) and IRA accounts. However, if possible, leave these savings intact to continue benefiting from tax-deferred growth.

Age 62

Social Security Payment Eligibility

At age 62, you are eligible to receive Social Security payments. However, delaying receiving Social Security benefits until age 70 increases your monthly payments later. The increase is generally 8% each year you delay up to age 70.

Age 65

Medicare Eligibility

At age 65, you are eligible for Medicare. Medicare is a government health insurance program covering most medical expenses for 65 or older.

After You’re Eligible to Retire

For many, the official retirement age is between 66 and 67. As lifespans increase, taking important steps after “retirement age” is crucial to ensure your money lasts and supports your lifestyle.

Age 72

First Minimum Distributions of Retirement Accounts

At 72, you must begin taking Required Minimum Distributions (RMDs) from your retirement accounts. This is a crucial milestone to remember, as failing to take these distributions can result in substantial tax penalties.

Secure Your Financial Future

Securing your financial future in retirement requires careful planning and execution. By hitting these important milestones at the appropriate ages, you can ensure you’ll have enough money to last throughout your retirement. However, working with a professional financial advisor to help you navigate these milestones and make informed decisions is crucial.

Have questions about your unique retirement plan and if you’re on track to hit your goals? Contact Us to meet with our team of financial planning advisors.