Key Ages for Financial Planning

Meredith Moore
4 min readMar 16, 2020
Financial Planning throughout Aging

You say it’s your birthday…happy birthday to you! If you’re old enough to have read those words to the tune of a popular Beatles song, you should be aware of key birthday milestones that hold financial significance.

Even if the words didn’t recall a familiar tune, listen up because some birthdays (and half-birthdays) represent financial opportunities and responsibilities — and a few give you only one opportunity to get it right. Miss the moment and the oversight could cost you in terms of financial penalties as well as missed opportunities.

Key age milestones in your financial life

  • 50 — The action starts when you reach half a century of accumulated wisdom. This year you can begin making additional contributions to retirement accounts. These “catch-up contributions” are additional amounts taxpayers 50 and older can deposit in IRAs, 401(k) accounts and other qualified plans, over and above the standard limits. Catch-up contribution limits allow those who turn 50 or older in 2020 to contribute:
  • $1,000 extra to an IRA
  • $6,500 more to a 401(k), 403(b), 457 or Thrift Savings Plan
  • $3K in catch-up contributions to a SIMPLE 401(k)
  • 55 — The IRS has a special rule for taxpayers 55 and older who want to take a distribution from their 401(k) or 403(b) retirement accounts. Known as the “Rule of 55,” this bit of the tax code allows some workers to avoid penalties, but only if you:
  • Are no longer be working for the employer that sponsored the plan
  • have quit, retired, been fired or laid off from the job during or after the year you turned 55
  • have not have rolled the money over into an IRA
  • 59 ½ — This milestone is the big one for access to retirement funds. If you’re already retired, you can usually access monies stashed away in IRAs as well as employer-sponsored retirement accounts without paying a 10% early withdrawal penalty. Still working? Depending on the specifics of your employer’s plan, you may or may not be able to take penalty-free distributions from the account. Even if your plan doesn’t allow “in-service” distributions you can take money out of an older 401(k), assuming you didn’t roll the balance over to the new employer’s…
Meredith Moore

Tireless worker. Financial Advisor Guru. Speaker. Writer. Leader. Personal Growth Junkie.