Most children stop being “and-a-half” somewhere around age 12. Kids add “and-a-half“ to make sure everyone knows they’re closer to the next age than the last.
When you are older, “and-a-half” birthdays start making a comeback. In fact, starting at age 50, several birthdays and “half-birthdays” are critical to understand because they have implications regarding your retirement.
Workers in certain qualified retirement plans are able to begin making annual catch-up contributions in addition to their normal contributions. Public safety workers may qualify to take a penalty free withdrawal from their government-sponsored defined benefit plans, if they have separated from service in the year they turn age 50 or later.
If you separate from service in or after the year you turn age 55 and have a qualified plan at the job you left you may be able to take distributions from the Retirement Plan penalty free. Be warned the strategy does not work if you move the money to an IRA.
Workers are able to start making withdrawals from qualified retirement plans without incurring a 10% federal income-tax penalty. This does not apply to inherited qualified plans as they never had a 10% penalty apply to them for the beneficiary.
Workers are first able to draw Social Security retirement benefits, unless they are widowed or disabled and would have been able to file earlier. However, if a person continues to work, those benefits will be reduced based on their earned. The Social Security Administration will deduct $1 in benefits for each $2 an individual earns above an annual limit. The penalty is reduced and then waived once an individual reaches Full Retirement Age.
Individuals can qualify for Medicare, unless they are disabled and may have qualified earlier. The Social Security Administration recommends applying three months before reaching age 65. However, benefits will take effect the first day of the month you turn 65 regardless of how early you apply.
Qualified individuals become eligible to receive 100% of their Social Security benefit, also known as FRA (Full Retirement Age). The age varies, depending on your birth year.
Anyone born July 1, 1949 or later must begin taking required minimum distributions (RMDs) from traditional IRAs and qualified retirement plans, such as 401(k), 403(b), and 457 plans. RMDs are based on your account balance and life expectancy and change each year based on those factors. This does not apply to inherited plans as most will require RMD’s within 1 to 10 years from when they are inherited, regardless of the beneficiary’s age.
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