What Birthday did you celebrate this year?

By Cristina Wiebelt-Smith, CPA, Wealth Advisor

As 2022 comes to a close, we’ve made another trip around the sun and we’re all one year older. This year was a big one for me – half-way to a hundred! The women in my family tend to live into their late 90s up to 102 so if there’s something I can do to build up more savings, I want to know about it.

We want to make sure you know about some important financial age milestones that could be helpful with your year-end planning.

Did you turn 50?

You can take advantage of “catch-up” contributions for several types of accounts. Here’s a case where the IRS didn’t complicate things – the catch-up amounts are the same no matter where your birthday falls during the year; no pro-rating required.

  • Contribute an additional $1,000 to your IRA or Roth IRA.
  • Contribute an additional $1,000 to your Health Savings Account.
  • Contribute an additional $6,500 to your 401k, 403b or 457 plan.
  • Contribute an additional $3,000 to your Simple 401k plan.

Did you turn 55?

The Rule of 55 says that if you have a retirement plan at a former employer and you left that employer after age 55, you can take distributions from the plan without any penalty. The distributions may be taxable.

Did you turn 59 ½?

You can now take distributions out of your retirement plans or IRA without the 10% penalty. The distributions may be taxable.

Did you turn 62?

Congratulations! You’re now eligible for Social Security. However, even though you are eligible, it doesn’t necessarily mean it’s the best time to take Social Security. We can model a variety of scenarios for you so you’ll have the right information to make the best decisions for your life.

Did you turn 65?

You are now eligible for Medicare which can be a huge relief if you’ve been paying for your own health insurance.

Did you turn 70 ½?

You can make a Qualified Charitable Distribution, “QCD” which is a tool for getting money out of your IRA without paying tax on it while giving to your favorite charities. If the distribution is sent directly from your IRA to the charity, instead of stopping at your checking account first, the distribution is not taxable income.

Did you turn 72?

You might need to start taking a Required Minimum Distribution or “RMD” by December 31st. The IRS requires that you take a certain amount out of IRAs and other retirement accounts every year once you reach age 72. This does not apply to Roth IRAs. There is a hefty 50% penalty if you don’t take the money out so it’s very important to be aware of these distributions.

Be ready at any age.

Different milestones bring different options. Let’s talk about what’s best for your unique situation at each milestone – and right now. Schedule a conversation.


Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½ may be subject to an additional 10% IRS tax penalty,

This piece is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.

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