Important Age Milestones when Retiring

The Money column at USNews has identified several critical ages on the road to retirement. Personally I'd love to retire early but it will be many years before I can touch my 401-K without penalty and private health insurance is terribly expensive.

• 59½. Earliest age for withdrawals from tax-deferred retirement accounts like 401(k)s, 403(b)s, and IRAs without a penalty.
• 62. Earliest age to collect Social Security benefits. But you may want to wait. If you collect at 62 you'll only get 75% of what the government will pay if you wait until 66 or 67 (for people born after 1943).
• 65. Eligible for Medicare benefits. If you don't have employer insurance then pay attention to the seven-month window (three months before 65 up to four months after your birthday) to sign up. If you miss this window, you may wind up paying higher Medicare premiums for the rest of your life.
• 66. Your full retirement age (FRA) for Social Security benefits if born between 1943 and 1954, 67. Your Full Retirement Age if born in 1960 or later.
• 70. The oldest age at which your Social Security benefits increase if you defer collecting. After your FRA benefits rise by about 8% a year each year until you turn 70.
• 70½. If retired, you MUST begin taking money from your tax-deferred retirement accounts.
• 85. This one was new to me. It's a standard age of payments of "longevity annuities" purchased 20 or even 30 years earlier. Insurance companies sell these for for people who are worried about running out of money in their final years. If you die before the payoff age or 80 or 85, then you and your heirs get nothing. If you live to the payoff age, you get a monthly check for the rest of your life.

Bottom Line

Keep these age dates in mind. They are very important to a successful retirement.