There are some important milestones to remember as you age especially the ones related to Social Security, Retirement Savings and Medicare.
Here are some to keep in mind:
Age 50 or over
Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions to their retirement accounts. Catch-up contributions up to $5,500 in 2013 and 2014 can be made to 401K, 403b, SARSEP and 457B accounts. Catch-up contributions of $1,000 can be made to traditional or Roth IRA accounts.
Early withdrawals from 401K plans can be made by retirees who leave their jobs in the year they turn 55 or older without having to pay the 10 percent early withdrawal penalty. Withdrawals from traditional 401(k)s will be taxed as regular income.
Age 59 1/2
When you reach 59 1/2, you can make penalty-free withdrawals from your IRA. The the 10 percent penalty no longer applies. Regular income tax will still be due on each withdrawal.
If withdrawing from your IRA before you reach 59 1/2 you may be subject to the 10% penalty tax. The additional tax is 25% if you take a distribution from your SIMPLE-IRA in the first 2 years you participate in the SIMPLE IRA plan. There are some exceptions to the early distribution penalties including some medical expenses, disability, home purchase or construction costs, education costs, medical insurance costs, and as described in the age 55 section above.
Age 60 is the earliest date when you can start receiving Social Security benefits as a widow/widower from a deceased spouse’s record.. Taking early Social Security benefits as a widow/widower does not affect your own filling date. If you do not have to file early or at Full Retirement Age (FRA) you can let your own benefit grow until the age of 70.
Your can file for Social Security beginning at age 62. You may receive up to 30% less (permanently) than if you filed at Full Retirement Age (FRA). Some things to consider when making this decision include your marital status, your health, your financial situation. Also if you are still working your income may affect your Social Security benefit.
At age 65 you become eligible for Medicare. If you’re already receiving Social Security benefits by your 65th birthday, you’ll be automatically enrolled in Medicare. Otherwise the sign up period for Medicare is as follows: you can sign up 3 months before your birthday, the month of your birthday and three months after your 65th birthday. There are penalties (including permanent higher premiums) for signing up late so it is important not to miss the sign up period. If you sign up for Medicare Part B you can buy Medigap for a six month period after your 65th birthday. Again if you miss the Medigap sign-up period you may have to pay higher premiums or may even be denied coverage.