Working Americans at or approaching retirement age today face many unprecedented challenges unique to their generation. That’s why it’s important to have a retirement plan that addresses these challenges and uncertainties head-on. One of the keys to doing just that is being aware of the retirement planning milestones that occur from age 50 onward. Several of these milestones present you with options that could significantly impact whether you have enough income to help achieve your retirement goals.
Of course, sound retirement planning is more than just a matter of paying attention to these age milestones. But being aware of them and making the right decisions in coordination with your financial advisor when each one comes along can help improve your odds of success! With that in mind, let’s go through each milestone one at a time and discuss its significance along with some of the things you may want to consider when deciding whether to take action.
1. Age 50
This is when you are first allowed to make “catch-up” contributions to 401(k)s and other tax-deferred employer-sponsored retirement plans, as well as IRAs. Amounts are subject to change each year, and up-to-date guidelines are always available at irs.gov. Congress added the catch-up contribution option to retirement plans due to concerns that Baby Boomers, specifically, haven’t been saving enough for retirement—which most studies and surveys indicate is true. Deciding whether you should make catch-up contributions is a matter you should discuss with your financial advisor while considering numerous factors, including when you’d like to retire, your additional financial assets (both current and expected, including Social Security), and your retirement goals—which we’ll discuss much more in just a bit.