In retirement planning, your age determines the specific actions you may be able to take. Your age dictates, for example, when you can take part in a retirement plan, make contributions to IRAs, and take money from your plan. Below are 10 significant ages you should plan for:

Age 21

A retirement plan sponsored by an employer may be allowed to exclude employees who are younger than age 21, but must sponsor the retirement plan of all employees who are 21 and over.

Age 50

Many employers allow their employees who are at least 50 years old to make annual catch-up contributions worth up to $5,500 to employer-sponsored plans that accept elective deferrals. Older employees are deemed eligible to defer up to $23,000 of taxes in tax year 2013 in a 401(k) plan. Older workers may also contribute an extra $1,000 to a Roth or traditional IRA in addition to the $5,500 currently allowed in 2013. Some limits based on annual income may apply.

Age 55

If you are an employee who retires in the year you turn 55 years old or later, then you can make 401(k) withdrawals, and will not be subject to the 10% early withdrawal penalty. This does not apply for IRAs. All withdrawals that are made from traditional 401(k) plans, however, will be taxed as regular income.

Age 59 ½

Once you turn 59 ½, the early withdrawal penalty of 10% on all qualified retirement plans will end, including on IRA withdrawals. Take note that income tax will be due on the amount that you withdraw.

Age 62

Employees are entitled to sign up for Social Security benefits by the age of 62. Payments, however, could be reduced by as much as 30% if you begin payments at this age. Payouts decrease by a fraction of the percent for every month that you claim before the full retirement age.

Age 65

Eligibility for Medicare begins once you reach age 65. Initial enrollment begins three months before the month you turn 65, and this period ends three months after your 65th birthday. It’s best to sign up for this government health plan as soon as possible in order to avoid the 10% premium increase for late enrollees. If you are protected by a group health plan and wish to avoid paying the higher premiums, then sign up for the health plan within eight months of leaving the group health plan or leaving your job.

Age 66

All baby boomers or Americans born between 1943 and 1954 are eligible to receive the full amount of Social Security that they are entitled to at age 66. This retirement age becomes 66 years and two months if you were born in 1955, and then further increases to 66 and 10 months if you were born in 1959.

Age 67

For younger workers, the full retirement age for Social Security is higher. Individuals born in 1960 and onwards are entitled to receive their full Social Security retirement benefits at age 67.

Age 70

Social Security payments continuously grow by up to 8% for every year you delay claiming until the age of 70. There is no additional incentive to delay collecting your checks after age 70.

Age 70 ½

At the age 70 ½, withdrawals from IRAs and 401(k) plans become required. Seniors who do not take required minimum distributions from their retirement accounts every year must pay a 50% excise tax on the total amount that should have been withdrawn.

Author's Bio: 

Frank J. Velten, CFP® is a Certified Financial Planner Professional (TM) in Tampa, FL and can help set up a financial plan for every age. Contact F. J. Velten & Sons, Inc. for a free investment portfolio, annuity and estate planning review. For more information call 1-866-815-0300 or visit

F. J. Velten & Sons, Inc. is an independent firm with securities offered through Summit Brokerage Services, Inc., Member FINRA, SIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and F.J. Velten & Sons, Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction.

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