10 Important Ages for Retirement Planning

Keep these ages in mind to boost your retirement benefits and avoid penalties.


Age 70. Social Security payments continue to grow by 8 percent per year for each year you delay claiming up until age 70. "The longer you can postpone it up until age 70, the better, especially if you have longevity in your family," says Botsford. Your spouse could also benefit if you delay claiming Social Security. "If someone waits until age 70, when they pass away, their spouse will be able to continue that higher benefit for the remainder of their life," says Tomlinson. After age 70, there is no additional benefit to delaying Social Security payments.

[See How to Finance Life Until 100.]

Age 70½. Withdrawals from 401(k)s and IRAs become required after age 70½. If you don't withdraw the correct amount, you will be required to pay a 50 percent excise tax on the amount that should have been taken out. The first distribution is due by April 1 of the year after you turn 70½. After that, annual withdrawals will be required by December 31 each year. If you delay your first withdrawal until April, you will need to take two distributions in the same year. "If you delay taking that first one, you are bunching up two years' worth of distributions into one tax year and you are going to have to be comfortable with whatever the tax impact of that is going to be," says Gerald Wernette, director of retirement plan services at Rehmann in Farmington Hills, Mich. In some cases, two distributions in the same year could push you into a higher tax bracket.

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