As health care advances over time, people are living longer and staying healthy longer. While preferences on working vs retirement vary from individual to individual. People live longer now and the amount in retirement savings required to support post-retirement living also increase. When ones plan for their retirement, there are some age considerations to remember. Try out scenarios on retiring at different age to your post retirement budget in our retirement calculator http://www.financialassured.com/
Catch-up Contribution at age 50
IRS allows employee to contribute additional $6,500 on top of $19,500 (2021 limits) to 401k or 403b retirement savings account.
Penalty Free Distribution from retirement savings after age 59 1/2
To stretch the most out of your retirement savings, avoid withdraw from IRA, 401k or 403b before 59 1/2 years old. An extra 10% penalty would apply for most withdrawals before that age.
Earliest age to collect Social Security retirement benefit is 62
You can start collecting Social Security retirement benefit at age 62, however it is a roughly 30% reduction in the amount you can collect per month as compare to start collecting at age 67.
Medicare benefit starts at age 65
Most Americans eligible for Medicare health coverage starting at age 65. Multiple part health care plan with optional parts total premiums range from about 200 to over a thousand dollars. Enrollee may choose Medicare Advantage Plans from private insurers for more options.
Required Minimum Distribution on retirement savings at age 70 1/2
Except for Roth IRAs, Required Minimum Distribution rule requires retirement account holders to distribute a minimum amount each year after reaching age of 70 1/2.
Never to early to start planning for retirement at any age.
If you start saving early, even a small amount could end up be tens of thousands of dollars in future. For example, if you start saving $100 per month at age 30 into an investment fund with conservative 3% return, you will have $60,000 saved by 60 years old. Retirement may feel like long time in the future to most younger people, understanding various factors affecting your retirement can help prevent a sad surprise years later.
