THE FISCAL BLUE PRINT
WITH COACH JEFF MONTGOMERY
Episode 61: Retirement Age Confusion!
Do you ever get confused about all the different ages and dates surrounding retirement? Social Security ages, RMD ages, Medicare ages…. the list can go on! Dates and age triggers in our retirement system can be really perplexing. In this week’s episode, we clear up confusion and discuss some common misconceptions about important ages & dates in the retirement planning realm.
I began to give this some thought based on some recent experiences I have had during our annual strategy meetings with our clients, where there was some confusion on the SS start dates.
It dawned on me that the dates and age triggers in our retirement system are really baffling! And folks that don’t do this for a living and deal with these dates everyday like we do, can get easily confused.
And to add even more confusion… sometimes the federal government changes the age triggers such as we saw in 2020 regarding RMDS
So without further delay let get to our practical planning segment and clear up some of these things ………shall we?
Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So unless you’re a client I cant give you advice because I don’t know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser , and your financial adviser………….right? that’s just common sense.
Common misconceptions/confusion on different retirement ages. You know sometimes we forget that this is what we do every single day so we pay attention to the different dates and ages of various retirement topics, but most people don’t do this for a living and it’s very easy to get confused about specific retirement dates and retirement age is when it comes to different things like Social Security, required minimum distribution’s, early withdrawal’s,
(3:15) Confusion about age 70 1/2, and age 72 under the new SECURE ACT. RMD’s!
(5:00) RBD Date; required beginning date. April 1st year after you turn 72
(7:50) Confusion about age 59 1/2, age 55, and the 457b rule: 10% IRS penalty
- Must always refer to the plan document. Not all plans will follow the IRS rule
- If you have a governmental or non-governmental 457(b) plan, you can withdraw some or all of your funds upon retirement even if you are not yet 59½ years old.
(11:40) SS ages; 60, 62, FRA, age 70:
- People sometimes get confused about how long they can delay Social Security and can end up missing some payments.
- Story about SS delaying to age 72 mistake. Back date application 6 months
- If widow or widower collecting from a deceased spouse’s SS record can start as early as age 60
- Child benefit if under 18 and parent is collecting
(18:30) AGE 50 This is the age that triggers many catch up contributions for various accounts
- IRAs $1000 extra catch up: $6,000 limit plus $1000
- No changes for 2022
- 401k $extra $6500 catch up; 19,500 to $26,000 (these are 2021)
- 2022 changes regular contributions up $1000! From 19,500 to 20,500
- Catch up contributions stays the same at $6500
- Simple IRA-small employer its extra $3,000 from $13,500 to $16,500 (2021)
- 2022 changes regular contribution up $500! From 13500 to 14000
- Catch up contribution stays the same at $3k.
- Now because the government likes to get us used to something and then all of sudden change the rules the age 50 catch up does not apply to Health Savings accounts!
- HSA the age is 55 not 50. $1000 catch up
(22:00) Age 65 important things to know
- Medicare enrollment 7-month window
- involving taxes: Extra deduction on top of regular std deduction. You will get an extra $1350 each if married and extra $1700 if single.
“We appreciate you joining us today for this episode of The Fiscal Blueprint.
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