Age Is More Than a Number, It’s a Milestone

Yes, it’s that time again. I have turned the wonderful age of 62. Now I get to ask that age-old Social Security question: Should I or should I not?

At age 62, I am now eligible for Social Security benefits. I have to decide if I should begin taking them now or if I should hold off. It’s a question millions of Americans have faced as they reach this age. Moreso, 62 is just one of the ages along the journey we call the “milestones of retirement.”

The first major milestone is age 50. Not only are you a half-century old, you have the privilege of adding additional funds to your retirement accounts, called catch-up contributions. For example, you can contribute an additional $6,000 to your 401(k) or an additional $1,000 to a traditional or Roth IRA.

Next up is age 55. This is when, if you stop working with your current employer, you may be able to access your tax-deferred accounts without the 10 percent penalty.

At age 59 1/2, you are considered old enough to retire in the eyes of the IRS. Congratulations! You can access retirement money in your IRAs and 401(k)s without having to pay any sort of penalty.

Then it’s the big 60. If you are a widow or widower, you may be eligible to withdraw Social Security benefits early, though at a reduced rate.

Now comes age 62. You can begin to receive Social Security, though you will receive the lowest standard rate.

At age 65, many employers will let you access your full pension benefits. You should be able to qualify for full Medicare benefits, as well.

When you reach 66 and 67, you arrive at the (current) full retirement age for most baby boomers. You can finally take advantage of full Social Security benefits.

When you reach age 70, Social Security benefits become serious. If you delayed taking your benefits and let them accrue for eight years with compounded cost-of-living adjustments, this is when they max out. This is the year you want to start taking Social Security no matter what.

Finally, we hit the last retirement milestone: age 70 1/2. This is the year Uncle Sam is ready for you to take your required minimum distributions (RMDs). Your RMDs come from your tax-deferred plans so the IRS can start collecting taxes on those distributions.

I have to admit, I have never wished to be whisked away to any of my previous birthdays. Every year brings fresh opportunities and new joy. With that, I suggest you take some time to consider each of these milestones. Make sure you take the opportunity to maximize each and every area of your financial plan.

And remember, just as you’re careful not to singe your eyebrows on your birthday candles, don’t let your financial plan singe your retirement.


–Gary Mattson