Taking steps at each of these stages could potentially help you maximize your income and minimize your taxes on the road to retirement.
Years before a typical retirement, key dates and deadlines pop up — things like being able to make catch-up contributions to your 401(k) plan and individual retirement accounts (IRAs) starting the year you turn age 50, or signing up for Medicare Part A at age 65, even if you're still working. If you aren't aware of them, they're easy to miss. Below are eight important stops along the way to retirement readiness.
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"The decisions you make during pre- and post-retirement years can be important in determining how much money will be available during retirement, so it's important to understand these key dates and their implications," says Christopher Vale, senior vice president, Preferred Client Experience, Bank of America.
You're now eligible to make
catch-up contributions* to 401(k) plans and other employer-sponsored retirement plans (if the plans permit catch-up contributions), as well as to
IRAs.Footnote 1 For IRAs, 401(k) plans and other employer-sponsored retirement plans, the annual catch-up contribution limit is adjusted periodically. View the
current annual contribution limits (PDF) to help you determine how much more you can contribute. As an added benefit, you may be able to reduce your current taxable income by increasing contributions to a tax-deferred traditional IRA or employer-sponsored retirement plan.
* Indexed for inflation
Once you reach age 59½, withdrawalsFootnote 2 from employer-sponsored retirement plans and IRAsFootnote 3 are generally no longer subject to the additional 10% federal tax on early withdrawals — though you still may owe regular income tax on the distributions. But it may be better to keep your retirement savings or investments intact so you don't sacrifice potential growth, suggests Vale.
Near-retirees can be even more aggressive savers, thanks to a provision of the SECURE 2.0 Act that took effect in 2025. From the year you turn 60 through the year you turn 63, you can make larger catch-up contributions to your 401(k) or other workplace retirement plan accounts (plan rules permitting). See the
current annual contribution limits (PDF) for this year's amount. This can be a benefit to anyone who got a late start on retirement savings and now has the available resources to turbocharge their contributions.
Age 62 is the minimum age at which you can choose to begin receiving Social Security retirement benefits. But bear in mind that for each year you postpone taking this benefit (until age 70), your monthly check will be larger. "By age 62, it's a good idea to have determined your strategy —
whether to start collecting Social Security, to keep working or to work and receive benefits — depending on your personal situation," Vale says. You can also choose to defer Social Security even if you are not working. If you continue to
work and take Social Security, there are income limits that could reduce your benefits until you reach full retirement age.
At age 65, if you're already receiving Social Security, you're automatically enrolled in Parts A and B of Medicare. But if you aren't yet receiving Social Security, you'll need to apply for Medicare. Your initial enrollment period lasts for seven months, beginning three months before the month in which you turn age 65. Missing your enrollment date may mean higher premiums for the rest of your life, but you can still sign up during one of the designated annual enrollment periods.
Your full retirement age for Social Security is the age at which you become eligible for full or unreduced retirement benefits. If you were born:
- Between 1943 and 1954, your full retirement age is 66.
- Between 1955 and 1959, your full retirement age is 66 plus two months for each year after 1954. For example, if you were born in 1956, your full retirement age is 66 and four months.
- In 1960 or later, your retirement age is 67.
- On January 1, use the previous year to determine your full retirement age.
Calculate your full retirement age at
Go to third-party website www.ssa.gov popup.
If you've waited until your 70th birthday to begin taking Social Security, you'll now get the biggest possible monthly benefit, which may be as much as 77% larger than if you had started receiving payments at age 62. Any further delay in claiming won't increase benefit amounts.
Even if you don't feel ready to start withdrawing funds from your traditional IRAs and employer-sponsored retirement plans, the government generally requires you to do so once you reach a certain age. The amounts of these required minimum distributions
(RMDs)Footnote 4 will vary from year to year, depending on the value of your non-Roth assets in your retirement plan accounts and your
age.Footnote 5 Use our
RMD calculator to determine your required amount. Failing to take an RMD or taking an insufficient amount can result in costly additional taxes. Choosing an appropriate distribution strategy can help you avoid issues and make the most of your retirement assets. For details on the latest legislation and regulations impacting your investment accounts, be sure to consult with your tax professional.
Footnote 1 Consult your tax advisor, as there are phase-out ranges for IRA contribution deductibility based on modified adjusted gross income (MAGI) ranges that are published annually and correspond to your federal tax filing status (married, filing jointly; married, filing separately; or single) and whether you or your spouse participate in an employer-sponsored retirement plan.
Footnote 2 The taxable portion of your withdrawal that is eligible for rollover into an individual retirement account (IRA) or another employer's retirement plan is subject to 20% mandatory federal income tax withholding, unless it is directly rolled over to an IRA or another employer plan. If you have not reached age
59½, the taxable portion of your withdrawal is also subject to a 10% additional tax, unless you qualify for an exception. Be sure you understand the tax consequences and your plan's rules for distributions before you initiate a withdrawal. Please note: You should consult your financial and tax advisors with specific questions about your personal situation if you are considering a withdrawal from your plan account.
Footnote 3 For a distribution from a Roth IRA to be federally tax-free, it must be qualified. A qualified distribution from your Roth IRA may be made after a five-year waiting period has been satisfied (this period begins January 1 of the tax year of the first contribution or the year of conversion, if earlier, to any Roth IRA) and you (i) are age 59½ or older, (ii) are disabled, or (iii) qualify for a special purpose distribution such as the purchase of a first home (lifetime limit of $10,000). In situations where the original account owner is deceased and the five-year waiting period has been satisfied, distributions to the beneficiary are also considered a qualified distribution. If you take a non-qualified distribution of your Roth IRA contributions, any Roth IRA investment returns are subject to regular income taxes plus a possible 10% additional tax if withdrawn before age 59½ unless an exception applies. A special additional income tax provision applies for converted assets that are not withdrawn in a qualified distribution. If a non-qualified withdrawal is made within five years of the conversion, the earnings withdrawn will be subject to income tax, and the entire withdrawal may be subject to an additional tax unless an exception applies as applicable for conversions. Consult your tax advisor for details.
Footnote 4 The required beginning date for RMDs is April 1 of the year after you turn age 73 (age 75 if you turn age 74 on or after January 1, 2023). You are required to take an RMD by December 31 each year after that. If you delay your first RMD until April 1st in the year after you turn age 73, you will be required to take two distributions in that year. Failure to take all or part of an RMD results in a 25% additional tax (or 10%, depending on how quickly you take the missed distributions) applicable to the amount of the RMD not withdrawn. Consult your tax advisor for more information on your personal circumstances.
Footnote 5 Effective January 1, 2024, SECURE 2.0 Act has eliminated RMDs for designated Roth accounts in employer-sponsored retirement plans during the lifetime of the owner. However, you must still take RMDs from designated Roth accounts for 2023, including those with a required beginning date of April 1, 2024.
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