As we age, certain birthdays come with more than cake and candles. They come with important financial milestones that can impact retirement planning, healthcare decisions, and tax strategies. Whether you’re approaching these ages or helping a loved one prepare, understanding what happens at each key birthday after 50 can make a big difference in your long-term financial picture.
Here’s what to watch for:
Age 50: Catch-Up Contributions Begin
If you’re 50 or older, the IRS allows you to make catch-up contributions to retirement accounts. In 2025, you can contribute:
- An extra $7,500 to a 401(k), 403(b), or similar employer plan*
- An extra $1,000 to an IRA (Traditional or Roth) *
This is a great opportunity to boost retirement savings as you approach retirement age, especially if you’re behind on your goals.
Age 55: Penalty-Free Withdrawals from 401(k)
If you leave your job in or after the year you turn 55, you may be able to withdraw from your 401(k) without the 10% early withdrawal penalty—a lesser-known but powerful rule known as the “Rule of 55.”
(Important: This doesn’t apply to IRAs.)
Age 59½: Access to Retirement Accounts Without Penalty
At this age, you can start taking withdrawals from IRAs and most retirement plans without the 10% early withdrawal penalty. You’ll still pay income tax on traditional account withdrawals, but the added flexibility can help support early retirement strategies.
Age 62: First Eligible for Social Security
You can claim Social Security benefits starting at age 62, but doing so comes with a permanent reduction in your monthly benefit—up to 30% less than if you wait until full retirement age.
This is a key age for decision-making and long-term planning.
Age 65: Medicare Eligibility
At 65, you’re eligible for Medicare. It’s important to enroll during your Initial Enrollment Period (3 months before your birthday month to 3 months after) to avoid potential late penalties. Even if you’re still working, you may need to coordinate coverage between your employer plan and Medicare.
Age 66–67: Full Retirement Age for Social Security
Depending on your birth year, your Full Retirement Age (FRA) is 66 to 67. Waiting until FRA to claim Social Security means you’ll receive 100% of your earned benefit amount, with no early-claiming penalties.
Age 70: Max Social Security Benefit
If you wait until age 70 to claim Social Security, you’ll receive your maximum monthly benefit, thanks to delayed retirement credits. Benefits increase by about 8% for every year you delay past your FRA up to age 70.
Age 73: Required Minimum Distributions (RMDs) Begin
As of 2025, RMDs must begin at age 73 from traditional IRAs and employer-sponsored retirement plans (unless you’re still working and don’t own 5% or more of the company).
Failing to take RMDs results in steep penalties, so it’s crucial to plan ahead for tax-efficient withdrawals.
Each of these birthdays opens the door to new opportunities and potential pitfalls in your financial plan. We can help ensure that you’re taking advantage of every benefit while avoiding costly missteps.
If you or someone you love is approaching one of these milestones, now’s the time to review your strategy. Because in retirement planning, timing isn’t just everything, it’s the key to success.
- gov- News Releases: Tax Time Guide 2025: Essentials needed for filing a 2024 tax return, Feb. 19, 2025.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
