9 Key Milestones for Retirement Planning
Retirement isn’t something that just happens on the last day that you walk out of work. It's a process that spans years—and includes a number of key planning milestones.
Being aware of important retirement milestones can help you create a financial plan that’s built to last. That can empower you to supercharge your nest egg and retire with ease—and isn’t that what it’s all about?
Consider this: If you’re married or partnered, the two of you could be retired for 25 to 30 years. While the length of your retirement will depend on your health and when you retire, in an average 65-year-old couple in average health, there’s a 50 percent chance that one of them will live to 92, and a 10 percent chance that one will live to 100. A lot can change in 30+ years, and the financial decisions you make leading up to retirement can have a profound impact on your preparedness for those changes.
Beginning at age 50, you’ll encounter a series of milestones that could affect critical aspects of your financial plan and retirement, including:
Your ability to leverage tax savings during your working years.
When you can begin drawing on your retirement income.
Your access to health care.
Together we can build a comprehensive financial plan using these key milestones. Doing so can help you maximize your financial security throughout retirement.
9 key retirement milestones
Here are the nine key retirement milestones to watch for:
9 Key Retirement Milestones
1. Age 50: Catch-up contributions
Once you reach age 50, you can put more money into your retirement accounts—thanks to catch-up contributions—allowing you to take advantage of higher contribution limits. If you got a late start saving for retirement or you just want to funnel more money toward your nest egg, catch-up contributions can offer the opportunity to accelerate your retirement savings in a tax-efficient way.
Here are the contribution limits for 2024:
Qualified plans, including 401(k) and 403(b) accounts: The regular contribution limit is $23,000, but folks who are 50 or older can kick in an additional $7,500 in catch-up contributions. The maximum combined contribution is $35,000.
Individual retirement accounts (IRAs): The contribution limit is $7,000, but if you're 50 or older, you can contribute an extra $1,000 as a catch-up contribution (for a maximum combined contribution of $8,000).
Thanks to the SECURE Act 2.0, changes to catch-up contributions are on the horizon. Here’s what you’ll want to watch out for:
Catch-up contributions will increase in 2025: If you’re 60 to 63 years old and have a 401(k), 403(b) or 457(b), you can make catch-up contributions up to $10,000 or 150 percent of the regular catch-up amount—whichever is greater. Meanwhile, IRA catch-up contributions are indexed to inflation.
Beginning in 2026, higher earners can only make catch-up contributions to a Roth account: If you’re 50 or older in 2026 and earn more than $145,000, any catch-up contributions you make have to be made with after-tax dollars and go into a designated Roth account. You won’t get a tax deduction on those contributions, but you’ll enjoy tax-free withdrawals in retirement.
2. Age 55: Penalty-free 401(k) withdrawals (aka the rule of 55)
If you plan to retire early, the rule of 55 could be an integral part of your retirement plan. It can help you fund an early retirement because it allows you to withdraw money from your current employer-sponsored 401(k) or 403(b) plan without incurring the regular 10 percent penalty for early withdrawals.
To take advantage of the rule of 55, you must leave your job when you’re 55 or older, and your plan must allow you these withdrawals. It’s important to note that these distributions will still count as taxable income. And remember that the rule of 55 does not apply to IRAs—including 401(k) or 403(b) funds you’ve rolled over into an IRA.
3. Age 59½: Penalty-free retirement plan withdrawals
Once you reach age 59½, you can begin taking penalty-free withdrawals from tax-deferred retirement accounts. That includes workplace 401(k)s and traditional IRAs. You can also start withdrawing earnings from Roth IRAs, assuming you’ve had the account for at least five years. This is welcome news if you’re planning to retire early.
4. Age 60: Eligibility for survivor benefits
If you were married to your now-deceased spouse (or deceased ex-spouse) for at least 10 years, and don’t remarry until after turning 60, you’ll be eligible for Social Security survivor benefits at age 60.
Also, if you worked for at least 40 quarters (the equivalent of 10 years) during your lifetime, you’ll have the option to collect benefits based on your own work record. That can help maximize your cash flow and lifetime income. If you are eligible for Social Security survivor benefits, it’s worth having a discussion with your financial advisor about how you can use it to boost your financial security in retirement.
5. Age 62: Social Security eligibility
You can claim Social Security benefits as early as age 62 (unless you are eligible for survivor benefits)—but just because you can doesn’t mean you should. Things play out differently if you claim Social Security at 62 vs. 67 vs. 70. If you claim early, you will get a reduced benefit for life. Your financial advisor can help you understand how Social Security fits into your broader financial plan so you can be strategic about when you claim your benefits.
6. Age 65: Medicare eligibility
At 65, you become eligible for Medicare. If you’re already receiving Social Security benefits, you’ll be automatically enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance). If you opt to delay your Social Security benefits until later, you have a seven-month period to enroll—beginning three months before you turn 65 and ending three months after you turn 65. Not signing up for Medicare during this window may result in a 10 percent premium increase for each 12-month period you delay enrollment.
When you become Medicare eligible, you’ll want to evaluate any additional Medicare coverage needs, such as prescription drug coverage (Part D) and Medigap (coverage for out-of-pocket expenses). It’s also important to note that Medicare does not cover long-term care expenses. With these costs on the rise, having a plan to pay for long-term care is becoming increasingly important.
7. Age 66 to 67: Full retirement age for Social Security
You’ll receive a larger Social Security benefit if you wait until your full retirement age (FRA) to start collecting it. Full retirement age varies depending on when you were born. If you were born:
Between 1955 and 1959: Your FRA is somewhere between 66 and 2 months and 66 and 10 months.
In 1960 or later: Your FRA is age 67.
8. Age 70: Maximum Social Security amount available (if you delayed your benefits)
While you can get your full benefit when you reach your full retirement age, you can receive even more if you choose to delay it until age 70 . This is when you’ll max out your benefit, which can be as much as 132 percent of your benefit amount. There is no additional increase after age 70, so if you haven’t started taking payments—now is probably the time to start.
9. Age 73: Required minimum distributions (RMDs) begin
If you have money in a tax-deferred retirement account, plan to start taking required minimum distributions (RMDs) at age 73 (75 beginning in 2033). The amount you must withdraw will depend on your account balance and a life expectancy factor that’s determined by the IRS. Failing to take your RMDs could result in a penalty of up to 25 percent of the amount not withdrawn.
Keep in mind that these distributions are taxable. That’s why it’s so important to be strategic about your retirement income sources. Withdrawing too much could actually push you into a higher tax bracket. Having other retirement income sources in the mix, like Roth accounts, annuities, and life insurance, can help you avoid an unwanted an tax burden in retirement.
Maximize the opportunity these retirement milestones offer
If you’ve already spent decades saving and planning for retirement, you may feel that the hard work is behind you. And while much of it is, it’s important not to lose focus as you get closer to retiring. Being prepared for these key retirement milestones can help you make the most of your savings.
By working with us and building a comprehensive financial plan, you’ll be well positioned to maximize the opportunities these milestones afford—and to feel comfortable knowing you have a plan to create the income you’ll need in retirement.
This publication is not intended as legal or tax advice. We do not render tax advice. Consult with a tax professional for tax advice that is specific to your situation. The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.
1 2022 Society of Actuaries and American Academy of Actuaries, Longevity Illustrator