7 key retirement deadlines you won’t want to miss

“The decisions you make during pre- and post-retirement years can be important in determining how much money will be available during retirement, so it is important to understand these key dates and their implications,” Debra Greenberg, director, Retirement and Personal Wealth Solutions at Bank of America. It is also a good idea to check in with your financial advisor and tax advisors regularly in the years leading up to retirement to assess your progress toward your goals, she adds.

You’re now eligible to make “catch-up” contributions to 401(k) plans and other employer-sponsored retirement plans (if the plans permit catch-up contributions), as well as to IRAs.¹ For IRAs, the annual catch-up contribution limit is $1,000. For 401(k) plans and other employer-sponsored retirement plans, the annual catch-up contribution limit is adjusted periodically (for 2021, it is $6,500). View the current annual contribution limits to help you determine how much more you can invest. As an added benefit, you may be able to reduce your current taxable income by increasing contributions to a tax-deferred traditional IRA or employer-sponsored retirement plan.

Once you reach age 59½, withdrawals from employer-sponsored retirement plans and IRAs are no longer subject to the additional 10% federal tax on early withdrawals — though you still may owe regular income tax on the distributions. But it’s generally better to keep your retirement savings or investments intact so you don’t sacrifice potential growth, suggests Greenberg.

Age 62 is the minimum age at which you can choose to begin receiving Social Security retirement benefits. But bear in mind that for each year you postpone taking this benefit (until age 70), your monthly check will be larger. Read “Social Security: Aiming for smarter payments” for more insights.

At age 65, if you’re already receiving Social Security, you’re automatically enrolled in both Parts A and B of Medicare. But if you aren’t yet receiving Social Security, you will need to apply for Medicare during one of the designated annual enrollment periods. Your initial enrollment period lasts for seven months, beginning three months before the month in which you turn age 65. Missing your enrollment date may mean higher premiums for the rest of your life. See “Your guide to Medicare: 5 key questions answered” for more insights, including what you should do if you’re still working.

If you were born between 1943 and 1954, age 66 is your “full retirement age” for Social Security. That’s the age at which you may first become entitled to full or unreduced retirement benefits. For those born after 1954, the full retirement age will increase by two months a year until the current maximum of age 67 for those born in 1960 and later.

If you’ve waited until your 70th birthday to begin taking Social Security, you’ll now get the biggest possible monthly benefit, which may be as much as 76% larger than if you had started receiving payments at age 62. Any further delay in claiming won’t increase the size of your check.

Even if you don’t feel ready to start withdrawing funds from your IRAs and employer-sponsored retirement plans, the government requires you to do so once you reach a certain age. The amounts of these required minimum distributions, or RMDs, will vary from year to year, depending on the value of your retirement plan accounts and your age. Failing to take an RMD, or taking an insufficient amount, can result in costly additional taxes. Choosing an appropriate distribution strategy can help you avoid issues and make the most of your retirement assets. For details on the latest legislation and regulation impacting your investment accounts, be sure to consult with your tax professional.