The Most Important Ages In Retirement Planning

When it comes to retirement planning, certain birthdays trigger major financial changes — whether you’re ready for them or not. These aren’t the milestone birthdays you celebrate with friends and family. They’re the ages when federal rules kick in, when contribution limits change, and when missing a deadline can cost you thousands of dollars in penalties or permanently reduced benefits.

Most people know that 65 is associated with retirement, but the reality is far more complex. The rules governing your 401(k), IRA, Social Security, and Medicare are tied to specific ages ranging from 50 to 73. Each one opens new opportunities or creates new obligations you need to understand.

The difference between knowing these dates and stumbling into them unprepared can add up to tens of thousands of dollars over the course of your retirement. Here’s what happens at each critical age — and what you need to do about it.

Age 50 – Catch-Up Contributions Begin

Starting at the half-century mark, you can stash an additional $8,000 per year in your 401(k) (in 2026) and an extra $1,100 in your IRA (in 2026). These higher limits are called “catch-up” provisions and exist because lawmakers recognized that many people don’t start seriously saving for retirement until later in life.

The math is powerful. If you max out both your standard 401(k) contribution ($24,500 for 2026) plus the catch-up amount ($8,000), you’re putting away $32,500 annually. Over 15 years with a 7% average return, that could grow to over $800,000 — before any employer match.

Money expert Clark Howard’s take is straightforward: “Catch-up is your friend. Additional years of work may be your friend. Side gigs could be your friend.” He emphasizes not feeling guilty about where you are. Focus on maximizing these opportunities now that they’re available.

Age 55 – The “Rule of 55”

If you leave your job in the calendar year you turn 55 (or age 50 for public safety employees), you can start taking withdrawals from that company’s 401(k) without the 10% early withdrawal penalty. This lesser-known rule can be incredibly valuable if you’re facing an early retirement.

Here’s the critical detail most people miss: This only applies to the 401(k) from the employer you’re leaving. Old 401(k)s from previous jobs don’t qualify. And if you roll that money into an IRA, you lose this benefit entirely — that money becomes subject to early withdrawal penalties until you reach 59½.

Think carefully before automatically rolling over your 401(k) into an IRA when you leave a job at 55 or older. If there’s any chance you’ll need to access those funds before 59½, leaving them in your employer’s plan might be the smarter move.

Age 59½ – Penalty-Free Withdrawals

You can now take money out of any of your 401(k) or traditional IRA without the 10% early withdrawal penalty. However, this money is still subject to income tax. This is the first age where you have unrestricted access to your retirement savings without penalties.

Roth accounts work more favorably. Since you contributed after-tax dollars, you can withdraw your contributions at any time. Once you hit 59½, you can also withdraw earnings tax-free (as long as your account has been open for at least five years).

Clark is a huge proponent of Roth accounts, calling himself “the man from Roth.” His reasoning: “A Roth 401(k) is vastly superior to a traditional 401(k). With a Roth 401(k), you put in money that’s already been taxed, and it’s never taxed again.” He believes tax rates will increase over time, making paying taxes now a winning strategy.

Just because you can withdraw money at 59½ doesn’t mean you should. The longer you leave money invested, the more time it has to grow.

Age 60-63 – Super Catch-Up Contributions

If you’re between ages 60 and 63, you can contribute up to $11,250 in catch-up contributions to your 401(k) in 2026 – that’s $3,250 more than the standard catch-up amount of $8,000. This “super catch-up” provision recognizes that these are often your peak earning years and your last realistic chance to boost retirement savings before leaving the workforce.

By your early 60s, major expenses like mortgages and children’s education costs are often behind you, freeing up more income for retirement savings. Combined with the standard 401(k) limit of $24,500, people ages 60-63 can contribute up to $35,750 in 2026.

One important rule that takes effect in 2026: If you earn more than $145,000, all catch-up contributions (including this enhanced amount) must go into a Roth 401(k) rather than a traditional pre-tax 401(k). This means you’ll pay taxes on that money now rather than in retirement.

Age 62 – Early Social Security

You can start taking Social Security at age 62, but think very carefully about doing so. Starting now will permanently reduce your benefits by up to 30% compared to waiting until your full retirement age. If you wait until 70, your benefit grows about 8% per year — a guaranteed return that’s hard to beat.

About 40% of Americans claim at 62, but Clark has strong opinions: “Almost no one, from a financial standpoint, should take Social Security at age 62.” His reasoning is mathematical: Every year you delay, your monthly check grows significantly. And because Social Security is adjusted for inflation each year, that growth compounds on a higher base.

If you work while collecting at 62, be aware of the earnings test. In 2026, if you earn more than $24,480, Social Security withholds $1 in benefits for every $2 above that threshold. This penalty disappears at your full retirement age.

Clark acknowledges legitimate reasons to claim early: you need the money for bills, you’re no longer working, or your health suggests shorter life expectancy. But he emphasizes running the numbers first using calculators from AARP or MaximizeMySocialSecurity.com.

Age 65 – Medicare Time

You can sign up for Medicare as early as three months before you hit 65, with coverage starting on your birthday. Your initial enrollment window runs from three months before your birthday month through three months after — a seven-month window total.

Don’t miss this deadline. Late enrollment can result in permanent penalties. For Medicare Part B, you’ll pay an extra 10% for each 12-month period you were eligible but didn’t sign up. That penalty never goes away.

Medicare has several parts: Part A (hospitalization), Part B (doctor visits), Part D (prescriptions), and Medigap/Supplemental plans that fill in the gaps.

Clark has strong opinions about Medicare Advantage plans. While about half of beneficiaries choose these bundled plans for their lower premiums, Clark calls them “Medicare Disadvantage plans.” His main objection: “Once you are in an Advantage plan, it’s difficult to switch to regular Medicare.” If you develop health issues and want to switch back, you’ll likely face medical underwriting and could be denied coverage or charged much higher premiums.

“With traditional Medicare, you have many more options to seek out the best care, best specialists and best hospitals,” Clark explains. “With Medicare Advantage, the insurer makes money by limiting your care and your options.”

If you retire before 65, you’ll need to bridge the gap with COBRA or an ACA marketplace plan. Budget carefully — this period can be expensive.

Age 66-67 – Full Retirement Age

Your “full retirement age” (FRA) for Social Security falls somewhere between 66 and 67, depending on your birth year. This isn’t when you’re required to retire — it’s when you can collect your full Social Security benefit without any reduction.

Here’s the schedule:

• Born in 1957: FRA is 66 years and 6 months
• Born in 1958: FRA is 66 years and 8 months
• Born in 1959: FRA is 66 years and 10 months
• Born in 1960 or later: FRA is 67

This age matters because it’s when you receive 100% of your earned benefit. Claim earlier and it’s permanently reduced. Wait longer (up to age 70) and your benefit increases by about 8% per year.

The earnings test also disappears at FRA. Before this age, if you collect Social Security while working, you face earnings limits ($24,480 in 2026 if you’re under FRA all year, or $65,160 if you reach FRA during 2026). Once you hit FRA, you can earn unlimited income without benefit reductions.

Despite the name, most Americans retire earlier. The median retirement age is 62, with nearly 60% of retirees stopping work earlier than planned — often due to health issues or job loss rather than choice.

Age 70 – Maximum Social Security Benefits

Your Social Security benefits increase about 8% every year you delay past your full retirement age, up to age 70. If you haven’t started this time, start now – there’s no additional benefit to waiting past 70.

The math is compelling. If your full retirement age benefit would be $2,000 per month at 67, waiting until 70 boosts it to $2,480 — a 24% increase for life. That’s $5,760 more per year, with every cost-of-living adjustment applied to this higher base.

Clark waited until his 70th birthday in June 2025 to start collecting. As an excellent saver who doesn’t need Social Security for daily expenses, he chose to maximize his benefit. His advice: “Wait as long as you possibly can.”

The breakeven matters. If you claim at 62 versus 70, you get eight extra years of smaller checks. But if you live past your early 80s (and the average 65-year-old will), the higher payments from waiting usually result in more total lifetime benefits.

Only about 9% of Americans wait until 70, despite it often being the mathematically optimal choice. For married couples, there’s an added benefit: the higher-earning spouse waiting until 70 means the surviving spouse receives a larger benefit.

Age 73 – Required Minimum Distributions

You must start taking distributions from your 401(k) or traditional IRA at age 73. This age has increased significantly — it was 70½ until 2020, jumped to 72, then to 73 in 2023, and will hit 75 in 2033.

Why RMDs exist: Traditional retirement accounts let you defer taxes for decades. The IRS eventually wants its cut, so it requires you to start withdrawing and paying income tax on a portion of your savings each year.

How much to withdraw: Your RMD is calculated by dividing your December 31 account balance from the previous year by your life expectancy factor from IRS tables. For example, if you’re 76 with $300,000 in your IRA, your distribution period is 22.0, requiring a $13,636 withdrawal.

Key timing rules:

• First RMD can be delayed until April 1 of the year after you turn 73
• Delaying means taking two distributions in one year, potentially pushing you into a higher tax bracket
• All subsequent RMDs must be taken by December 31

Employment exception: Still working at 73 and don’t own 5% or more of the company? You can delay RMDs from your current employer’s 401(k) until you actually retire.

Major change for Roth 401(k) accounts: As of 2024, Roth 401(k) and Roth 403(b) accounts no longer require RMDs during your lifetime — huge for estate planning. (Roth IRAs have never required RMDs from the original owners.)

Penalties decreased: Missing an RMD now costs 25% of what you should have withdrawn (down from 50%), or just 10% if you correct it within two years. The IRS may waive the penalty entirely if you show reasonable error and correct it promptly.

Tax-smart tip: If you’re charitably inclined, you can donate up to $111,000 (in 2026) directly from your IRA to a qualified charity through a Qualified Charitable Distribution (QCD). It counts toward your RMD and reduces your taxable income.

Quick Reference: Retirement Age Cheat Sheet

• Age 50: Catch-up contributions begin: Add an extra $8,000/year to 401(k), $1,100 to IRA.
• Age 55: Rule of 55: Penalty-free 401(k) withdrawals if you leave your job this year.
• Age 59½: Penalty-free withdrawals from all retirement accounts.
• Age 60-63: Super catch-up: Contribute up to $11,250 extra to 401(k) ($35,750 total).
• Age 62: Earliest Social Security claiming age (but benefits reduced by 30%).
• Age 65: Medicare enrollment begins (don’t miss the window or face permanent penalties).
• Age 66-67: Full retirement age for Social Security (depends on birth year).
• Age 70: Maximum Social Security benefits (no benefit to waiting longer).
• Age 73: Required Minimum Distributions begin from traditional 401(k)s and IRAs.