Retiring? Plan for these 7 birthdays

When you’re young, you celebrate every step along the journey to independence: learning to drive at age 16, registering to vote at age 18, and raising a glass to toast your 21st birthday. But there are milestones to celebrate as you approach retirement too.

Our guide can help you understand key ages and how to best prepare for them so you can enjoy what you worked hard to achieve.

So kick back, put your feet up, and celebrate these 7 ages—cake optional.

Age 59½

Celebrate: You can withdraw from your IRA and 401(k) without penalty

Age 59½ may be worth a small party. After you reach this milestone, you can withdraw from your traditional retirement accounts without being subject to a 10% early withdrawal penalty.* Keep in mind you’ll still owe federal income tax on your withdrawals.

Age 62

Celebrate: You’re eligible for Social Security benefits

The best time to collect depends on personal circumstances, but 62 is the earliest age you can claim Social Security retirement benefits. You’ll take a hit for claiming early, so only file if you need the money. How long you think you’ll live, how many assets you have, and whether you want to leave an inheritance are a few factors that can determine when to start collecting. If you can hold off, that’s another reason to celebrate!

Age 64¾

Celebrate: You can apply for extra benefits—like Medicare

It’s nice to know you’ll have support for health care costs when you stop working. The 7-month initial sign-up window to enroll in Medicare starts 3 months before you turn 65.** If you enroll within 3 months of your birthday month, you can avoid paying higher premiums. Just remember: If you still have employer-sponsored medical insurance, you can wait until that coverage ends. Check out your Medicare options today so you can figure out what will work best for you.

Age 65

Celebrate: You have more options—including Medigap

Medigap is supplemental private health insurance that covers some of the costs not covered by traditional Medicare. If you decide to purchase Medigap, the enrollment period begins the first day of the month you turn 65. During the enrollment window, you can’t be denied Medigap coverage or charged extra because of poor health. Like Medicare, you can wait to sign up for Medigap if you have insurance through an employer.

Age 66-67

Celebrate: You’re eligible for full Social Security

This is the age you qualify for your full Social Security retirement benefit (based on your birth year). Your benefit amount will increase each month you wait, until age 70 when it stops increasing. So you may want to hold off even longer depending on your circumstances.

Age 70

Celebrate: You’ll want to file for Social Security (if you haven’t already)

Don’t put off filing for Social Security retirement benefits past age 70. At this age, your benefits won’t increase by postponing them. If you waited this long, your benefits could be nearly one-third higher than if you’d claimed them at your full retirement age—just one more reason to celebrate turning 70.

Age 72

Celebrate: You begin taking RMDs

This is the age when tax deferrals on traditional IRAs and 401(k)s run out. Generally, you must withdraw your RMD (required minimum distribution) for a given year by December 31 of that year. However, if you’re taking an RMD for the first time, you may delay withdrawing until April 1 of the year after you turn age 72 (age 70½ if you attained age 70½ before 2020). If you decide to delay taking your first RMD, you’ll have to take 2 RMDs that calendar year, which may put you in a higher tax bracket. Whenever you decide to withdraw your money, be sure to thank yourself for preparing for this important stage of life.

These milestones may seem unusual to celebrate, but each of them signifies another benefit that you’ve earned. You’ve done the hard work to accumulate your nest egg—now let your investments do the rest. Together, we can make retirement the best chapter of your life.

*Exceptions to the 10% tax penalty include distributions made after death, after permanent and total disability, under a divorce agreement, and to pay unreimbursed medical expenses exceeding 10% of your adjusted gross income. 

**In certain circumstances, you may qualify for Medicare at a younger age than 65.

Notes:

All investing is subject to risk, including the possible loss of the money you invest.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.