Unforgettable Birthdays

While we like to think and treat every birthday as special, there are special, there are certain birthdays later in life that can affect your tax situation, health care eligibility, and retirement benefits. On today’s blog, we would like to list them and outline what happens as you reach certain birthdays.

Age 50

If you are a qualified public safety employee, you can begin to take out penalty free withdrawals from your qualified retirement plan after leaving your job if your employment ends after of the year you turn 50.

Age 55

If you're not a qualified public safety employee, you can take penalty-free withdrawals from your qualified retirement plan after leaving your job if your employment ends during or after the year you reach age 55.

Age 59½

At this point, all withdrawals from qualified retirement plans are penalty free after you reach this age regardless of whether you are still employed or not.

Age 62

When you reach age 62 you are eligible for a reverse mortgage. For more information on reverse mortgages, you can click here. You may also start collecting Social Security Benefits, though please note that they will be reduced by 30%. For full benefits you must wait until “full retirement age”, which can range from 66 to 67 depending on the year you were born.

Age 65

At age 65 you are eligible to enroll in Medicare. One should note that Medicare Part A hospital insurance benefits are automatic for those eligible for Social Security. Meanwhile, Part B benefits are voluntary and have a monthly premium. We recommend that to get coverage as early as possible, you should enroll about 2-3 months before turning 65.

Age 70½

You must start taking minimum distributions from most tax-deferred retirement plans or face a 50% penalty on the amount that should have been withdrawn. Annual required minimum distributions are calculated according to life expectancies determined by the federal government.

To learn more about important birthdays, click here, or call our office at 201-342-3300. One of our associates will be happy to speak to you.