9 Retirement-Related Age Milestones You Don't Want to Miss 🎂

As women, talking about our age and money are very uncomfortable topics, aren't they?! But let me tell you—there a few age milestones to make sure you have on your calendar. 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 make sure to maximize your retirement savings, avoid penalties and make sure you're on top of your retirement. So, where do we begin? Ideally in your mid-to-late forties—with milestones starting at age 50 that will have a big impact on your retirement planning.

Before presenting the list, I want you to meet Sarah, an independent woman and client of my firm who came to me in her 50s.

A Story from a Client: Sarah’s Financial Journey

At age 52, Sarah 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 her money and her age weren't exactly comfortable for her at first.

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 through catch-up contributions, 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 around 8% per year! She felt empowered knowing she had options and could plan for a more secure retirement.

Another 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, especially if she lived past age 80. 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 on track to hit her key milestones and live the retirement she dreams of.

9 Retirement 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 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. In 2024, you can save an extra $7,500/year in your 401(k) and $1,000 in an IRA.

Age 50+ Bonus Milestone: Discounts!

While it make make you feel like a granny, you should join and start saving when offers start landing in your mailbox from organizations like AARP. Having a membership can save you big on discounts galore on things like travel, entertainment and activities!

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 IRS's 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 when you have a traditional IRA—can help you manage your income and taxes in retirement. As an example, perhaps it would make sense if you've downsized your career to take some money out of your retirement savings now when your tax rates are possible lower versus waiting until your required minimum age for distributions. (More on that below!)

Age 62: Social Security

You can start claiming Social Security at age 62, but should you? 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 and a few months 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 compound and 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.

Ages 73-75: Required Minimum Distributions

If you’ve been saving diligently in a traditional retirement account, and depending on your birth year, you’ll need to start taking annual required minimum distributions (RMDs) from your savings between the ages of 73 to 75. Missing these can result in hefty penalties, so it’s important to plan ahead. But don’t worry—a good financial planner can help you stay on track with your RMDs and optimize your tax situation.

Ages 80+: Have a Plan for Long-Term Care

According to the American Association of Long-Term Care Insurance, half of long-term care insurance claims begin after age 80. More than two-thirds of Americans age 85 or older are women, and eight out of 10 centenarians (those who reach age 100) are women. Women spend an average of three years needing long-term care if they live past 80. More than 70 percent of nursing home residents are women, and their average admission age is 80.

Download the Free Milestones by Age Infographic Below 👇🏼

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.