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Key Benefit Ages

Elsewhere in, we’ve talked about the importance of creating a vision for retirement and putting strategies in place to help fund that dream. There’s another aspect you may want to keep in mind as well: the timing of when you retire. Retiring a year too early or too late can impact whether you get the most out of your hard work and planning.

For example, if you want to retire in your early 50s and are depending on qualified retirement products (such as 401(k) plans and IRAs) for income, you may be hit with penalties and taxes if you withdraw those funds before age 59½. Another special age is 70½, but for a very different reason. At that point in your life, you must start taking money out of your retirement plans. If you don’t, the IRS will assess a penalty tax on what you should have withdrawn.

There are exceptions, of course. If you suffer a separation of service (being fired or laid off, for example) at age 55 or later, you can access 401(k) funds in a lump-sum payout without penalty. The same goes for retirement at 55. If you do that, you’ll pay only standard income tax, but then that money-making account is closed for good.

Most people think of age 65 for retirement because it’s the point at which most employer-sponsored plans pay off, but there will always be shades of gray. You may have enough saved to retire and can wait for your funds to mature, or you may love your career so much that you plan to work well past 65. In either scenario, make sure you understand the important milestones along the way.

Key Ages for Personal Retirement Savings
Age What happens now
50 You can start making "catch-up" contributions to your retirement savings:
- Save an additional $5,000/year in your 401-K
- Save an additional $1,000/per year in an IRA
   (Roth or Traditional)
55 If you have a separation of service (e.g., fired, laid off), you can access your 401-K as a lump-sum payout without penalty, although you will pay standard income tax.
59 ½ In general, this is the age at which you may begin drawing funds from your retirement accounts without paying penalties for early withdrawal. There are exceptions to the penalty in the case of death or disability, for certain medical and education expenses, and first-time home purchase.
70 ½ You must begin taking the required minimum distribution (RMD) from your 401-K and traditional IRAs. If you do not take the RMD, the IRS will assess a hefty tax penalty on the amount you should have withdrawn. (Roth IRAs are exempt from RMD rules.)
Source: Internal Revenue Service,
Key Ages for Social Security Benefits
Age What happens now
60 Widows/widowers may receive reduced Social security benefits based on a deceased spouse's earnings. Your survivors benefits are permanently reduced a fraction of a percent for each month before your full retirement age.
62 You may receive reduced Social Security retirement benefits based on your own earnings. The further you are from your full retirement age (as defined by the Social Security Administration) the greater the amount of the reduction.
65 The full retirement age for persons born in 1937 and earlier. For persons born between 1938 and 1959, the full retirement age increases incrementally.
67 The full retirement age for persons born in 1960 and later.
70 If you delay retirement past your full retirement age, you may qualify for delayed retirement credits, resulting in a boost in benefits when you do retire. Delayed retirement credits stop at age 70 no matter how long you continue working.
Source: Social Security Administration,

Products for this Life Stage:*

Consider additional sources of income.

Annuities can provide ongoing sources of income for retirement.

More Good Ideas for Retirement:

Explore the future.

Our Retirement Financial Tools can help you see what’s necessary for retirement at different ages.

Evaluate your investments.

You can get a sense for your current investment lineup with’s Savings Calculator Tool.

Western & Southern Life does not provide tax or legal advice. Please contact your tax or legal advisor regarding your situation.

*Products suggested for this Life Stage are not a specific recommendation or solicitation to purchase.


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Last Updated: 12/14/2017