The start of a new decade is always exciting, and turning 70 is no exception. But if you're turning 70 in 2024, you might have some important steps to take in the context of retirement planning. Here's what you need to know.
1. You shouldn't wait to claim Social Security
You're entitled to your full monthly Social Security benefit, based on your personal income history, once you reach full retirement age (FRA). If you're turning 70 in 2024 and were therefore born in 1954, your FRA is 66. If you haven't yet signed up for Social Security, that's actually a good thing, because you've snagged quite a nice boost for your monthly benefits.
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For each year you delay your Social Security filing past FRA, your benefits will grow by 8%. So at this point, you're looking at a 32% increase by signing up at age 70.
But to be clear, you'll want to file for Social Security in conjunction with your 70th birthday. Once you reach the age of 70, that monthly benefit can't grow anymore. If you delay your filing further, you'll just be denying yourself income that you're eligible for.
2. You have the option to continue working, even if you're receiving benefits
You may be gearing up to retire next year in conjunction with turning 70. But if not, more power to you.
Working longer has many benefits. It could be a good thing for your mental health and might also allow you to leave your nest egg untapped so your balance can grow even more.
But don't assume that you have to stop working once you sign up for Social Security. You're allowed to work and collect benefits at the same time at any age (well, at any age starting at 62, since that's the earliest age at which you can file for Social Security). But once you reach FRA, earnings from a job don't impact your monthly benefits at all.
3. You don't have to worry about required minimum distributions just yet
If you have your retirement savings in a Roth IRA or 401(k), you don't ever have to worry about required minimum distributions (RMDs). But if you have your money in a traditional IRA or 401(k) plan, RMDs will eventually come into play. However, you still have a few years before you need to take them.
For a long time, age 70 1/2 was the age that triggered RMDs. An update to the rules a few years ago pushed that age back to 72, and it's since been extended for people born between 1951 and 1959 to age 73. While RMDs are something you may want to start planning for in 2024, you don't have to take your first one in 2024.
Age 70 is an important age to celebrate. So go ahead and do that whenever your big birthday arrives in 2024. But also, be mindful of these points so you can make savvy financial decisions that lead to a dream retirement.
