Retirement is one of life’s most significant transitions, and proper planning can play a key role in shaping your future financial outlook. Throughout your working years, there are important retirement planning milestones that serve as checkpoints for your financial preparedness. Understanding these stages can help you make informed decisions, adjust your strategy as needed, and move toward your retirement goals with clarity. 

Age 50: Catch-Up Contributions Begin 

One of the first major retirement planning milestones occurs at age 50. At this stage, individuals can begin making catch-up contributions to tax-advantaged retirement accounts like 401(k)s, 403(b)s, and IRAs. For those who may have started saving later or want to boost their retirement savings, these additional contributions can be a valuable tool in building long-term wealth. 

• 401(k) and 403(b) Plans: You can contribute an additional $7,500 annually in 2025, on top of the standard limit. 

• IRAs: An extra $1,000 in contributions is allowed each year. 

Age 59½: Penalty-Free Withdrawals from Retirement Accounts 

At age 59½, individuals gain the flexibility to withdraw funds from tax-deferred retirement accounts, such as IRAs and 401(k)s, without the 10% early withdrawal penalty. However, it’s important to consider the tax implications of withdrawals, as traditional retirement accounts are subject to income tax upon distribution. 

Age 62: Social Security Eligibility Begins 

Social Security benefits can be claimed as early as age 62, but doing so results in a permanent reduction in monthly payments compared to waiting until full retirement age (FRA). Before deciding when to claim benefits, consider: 

• Your anticipated retirement lifestyle and expenses 

• Other sources of retirement income 

• The impact of delaying benefits on your overall retirement plan 

Age 65: Medicare Enrollment Begins 

At 65, most individuals become eligible for Medicare. The initial enrollment period begins three months before turning 65 and lasts for seven months. Signing up on time helps avoid late enrollment penalties and gaps in healthcare coverage. It’s also an important time to review additional coverage options, such as Medicare Advantage or Medigap policies, to supplement healthcare expenses in retirement. 

Age 67: Full Retirement Age (FRA) for Social Security 

For individuals born in 1960 or later, full retirement age (FRA) is 67. Claiming Social Security benefits at FRA allows you to receive your full benefit amount. Delaying benefits beyond this age increases monthly payments, which may be beneficial depending on your financial needs and life expectancy. 

Age 70: Maximum Social Security Benefits 

Delaying Social Security benefits past full retirement age increases the benefit amount by approximately 8% per year until age 70. After this age, no additional increases occur, so it often makes sense to claim benefits if you have not already done so. 

Age 73 or 75: Required Minimum Distributions (RMDs) Begin 

One of the most critical retirement planning milestones is the onset of required minimum distributions (RMDs), which now begin at either age 73 or 75, depending on your birth year.

• If you were born between January 1, 1951, and December 31, 1959, your RMD age is 73.
• If you were born on or after January 1, 1960, your RMD age is 75.
  

RMDs apply to traditional IRAs, 401(k)s, and other tax-deferred retirement accounts. These withdrawals are taxed as ordinary income, and missing a required distribution can lead to significant penalties.

Planning for Each Milestone 

Each of these retirement planning milestones represents an opportunity to adjust your financial strategy. Regularly reviewing your plan, making informed decisions about Social Security and tax-efficient withdrawals, and seeking professional guidance can help you navigate retirement with greater confidence. 

Do You Have Upcoming Retirement Planning Milestones? Take the Next Step Now

At The Advisory Group, retirement planning is more than just saving — it’s about creating a personalized roadmap that aligns with your goals, lifestyle, and evolving needs. Through our TAG Optimization Process (T.O.P.), we evaluate key areas of your retirement plan to optimize your overall strategy by coordinating its essential elements. Whether you’re decades away from retirement or preparing to transition soon, we help you make informed decisions at every stage. With regular reviews and adjustments, we work with you to keep your retirement strategy aligned with your long-term financial vision. Contact us today to discuss adapting your financial strategy for retirement!