Birthday Milestones to Retirement

As women, talking about our age and money are two of the most uncomfortable topics, arent they?! But let me tell you—these are some of the most important things to have on your radar. By understanding some key financial milestones and taking control of your financial journey, you can feel empowered and confident about what’s ahead.

By staying informed and making smart decisions at the right moments, you can maximize your retirement savings, avoid penalties, and truly secure your future. So, where do we begin? Right around age 49—with the milestones between then and age 72 that will have a big impact on your retirement planning.

A Story from a Client: Sarah’s Financial Journey

I want to introduce you to Sarah. At 52, she came to me feeling unsure about her retirement plan. Like many women, she had been so focused on raising her kids and building her career that she hadn’t given much thought to her long-term financial security. She had savings, sure, but the big picture? It wasn’t clear. And let’s face it, talking about money and age wasn’t exactly comfortable for her.

So here’s what we did: We broke it down step by step, focusing on key milestones, starting with catch-up contributions. At 50, Sarah was eligible to contribute extra to her 401(k) and IRA, and she was thrilled to know that she could ramp up her savings in the years before retirement. This gave her a sense of control, knowing that she was actively building her future security.

Next, we looked at Social Security. Like many, Sarah thought she should claim it as soon as she turned 62, but after we walked through the numbers, she saw how waiting until her full retirement age of 66 would increase her monthly payments by a significant amount. And better yet, if she can delay to age 70, she’ll compound her benefit by 85 per year! She felt empowered knowing she had options and could plan for a more secure retirement.

One thing Sarah hadn’t thought much about was long-term care insurance. Like many women, she hadn’t considered the possibility that she might need extended care down the road. We talked about how long-term care insurance could protect her savings if she ever needed assistance—whether that’s in-home care or a nursing facility. This was a game changer for Sarah. Knowing the benefits of a policy and that it would help protect her assets made her feel better, not just for herself, but for her family.

Now, Sarah is more confident than ever about her financial future. She’s hit those key milestones, knows the importance of long-term care insurance, and is on track to live the retirement she dreams of.

Financial Milestones You Don’t Want to Miss

Just like Sarah, these milestones can help you make the most of your financial journey. Here are the key points to keep in mind as you plan for retirement:

Age 49: Max Out Retirement Contributions If you’re nearing 50, now’s the time to take full advantage of your retirement accounts like a 401(k) or IRA. Maxing out these contributions is a smart way to make sure your money is working for you through the power of compounding interest. And don’t forget, employer matches and tax benefits can provide an additional boost!

Age 50: Catch-Up Contributions This is where things get exciting! Once you turn 50, you’re eligible to make catch-up contributions to your retirement accounts. This means you can contribute more than the usual limit, allowing you to boost your savings during the crucial years before retirement. For many women, this extra contribution makes a big difference—and it could for you too.

Age 55: The Rule of 55 Here’s something many people don’t know: If you leave your job at age 55 or older, you may be able to take withdrawals from your 401(k) without paying the 10% early withdrawal penalty. This can be a great option if you find yourself retiring early or transitioning to part-time work. It’s all about understanding your options, so don’t hesitate to get some help from a plan administrator or a financial planner!

Age 59 ½: IRA Withdrawals Once you reach this milestone, you can begin withdrawing from your IRA without penalties. This is an important moment because understanding the tax implications—whether you have a traditional IRA or a Roth IRA—can help you manage your income and taxes in retirement.

Age 62: Social Security You can start claiming Social Security at age 62, but it’s important to remember that claiming early will reduce your monthly payments. This is a big decision, and waiting just a few more years could significantly increase your benefit. We’ll explore what makes sense for you based on your unique situation.

Age 65: Medicare Enrollment This is a milestone you can’t afford to miss. When you turn 65, you become eligible for Medicare, and there’s a specific enrollment window to avoid penalties. If you’re still working and covered by a health plan, there are other considerations, but making sure you have Medicare lined up is key to avoiding unexpected health costs.

Ages 66-67: Full Retirement Age for Social Security Depending on when you were born, your full retirement age may be 66 or 67. This is the age when you can claim your Social Security benefits without any reductions, which can make a significant impact on your retirement income. And if you wait even longer, up until age 70, those benefits will continue to grow.

Age 70: Maximize Social Security Waiting until age 70 to claim Social Security has a major perk—your payments increase by about 8% each year after your full retirement age. For many women, this strategy results in a much larger monthly check, giving you more financial security in your later years.

Age 72: Required Minimum Distributions If you’ve been saving diligently in a traditional retirement account, at age 72, you’ll need to start taking required minimum distributions (RMDs). Missing these can result in hefty penalties, so it’s important to plan ahead for them. But don’t worry—a good financial planner can help you plan ahead for this and optimize your tax situation.

So, what’s your next step? Start thinking about your financial journey and where you are in relation to these milestones. Whether you’re getting close to 50 and ready to maximize your savings, or you’re thinking ahead about Social Security and long-term care, now is the perfect time to take action and plan ahead!

For more tips like these, download my free ebook series that covers debt management, growing your income to save more, investing wisely and retirement planning. To learn what it's like to work with a financial advisor, you can book a free call with Life Story Financial.