Finance is Fun: Important Birthdays
By- Marion SyversenJune is a big month for birthdays. It’s my birthday month. As a matter of fact, according to the U.S. Census Bureau June and July are the 3rd and 4th most ‘popular’ birthday months. Let’s look at some birthdays that are important for you when planning your finances. Age50 – The age at which you may contribute higher amounts into retirement plans. The provisions, called ‘catch-up’ provisions, allow you to save more than younger workers in qualified retirement plans. So for Traditional 401(k ), 403 (b)’s younger workers can save $17,500 per year but those over 50 can save $23,000 before taxes per current IRS contribution limits. If you have a Traditional Individual Retirement Account (a Traditional IRA) under 50′s can save $5,500 and over 50 you can sock an additional $1,000 away per year per current IRS contribution limits. Age 59.5 – this is the age you become eligible to withdraw money from retirement accounts without a penalty. Taxes may be due on annual distributions but there will no longer be the deterent of an additional 10% penalty for ‘early withdrawal.’ Age 62 – This is the earliest age at which you can receive Social Security retirement benefits. Age 65 – this is the earliest age you may begin collecting Medicare. Age 65-67 -At this age (DEPENDING ON YOUR DATE OF BIRTH) you may be eligible for full Social Security retirement benefits. Age 70.5 – Now you must begin taking Required Minimum Distributions or RMDs from your qualified retirement plans. The RMD varies depending on certain circumstances. And you can find details on the tables used to calculate the percentage on the IRS’ web site. Citations: http://www.babycenter.com/0_surprising-facts-about-birth-in-the-united-states_1372273.bc http://www.selfgrowth.com/articles/important-tax-birthdays http://www.ssa.gov/survivorplan/survivorchartred.htm http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/12/~/earliest-age-to-get-social-security-retirement-and-medicare http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Required-Minimum-Distributions#4
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