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The 6 Most Important Ages on the Road to Retirement

By Matthew Frankel, CFP® - Feb 8, 2016 at 7:19AM

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Here are six milestone ages for retirement planning, and what happens at each one.

Image source: Steven Depolo. 

Retirement planning is a lifelong process -- that is, there aren't any ages that don't matter to your retirement. However, there are some milestones in your life that are more significant than others. Here's a quick guide to the six most important ages you'll reach on the road to your retirement, and what you need to know about each one.

Age 55: If you have a retirement plan through a current or former employer, such as a 401(k), this could be an important age for you. After you turn 55, you are allowed to withdraw retirement savings penalty-free as long as you have separated from service with the employer. This could be useful if you plan to retire early, but be aware that this doesn't apply to IRAs.

This is also the age when you're considered a "senior citizen" by many businesses, so take advantage of the discounts.

Age 59-1/2: This is the normal age at which you can withdraw money from your retirement accounts, including IRAs, without paying a penalty to the IRS. You can do so even if you're still working, although I recommend leaving retirement savings alone for as long as possible.

Age 62: At age 62, you are eligible to collect Social Security benefits if you choose to do so. Just be aware that filing for Social Security early reduces your monthly benefit amount for life. If you file for Social Security as early as possible, your standard retirement benefit will be reduced by 30%. On the other hand, if you choose to wait beyond your normal retirement age, your benefit can increase.

Here's a table to show you how claiming early or late can affect your Social Security benefit, and what this could mean to a hypothetical $1,500 monthly benefit.

If you file for Social Security at...

Your benefit will be this % of your full retirement benefit

A $1,500 benefit would change to...

Age 62



























Note: This chart assumes a full retirement age of 66 (see the Age 66 section below).

Age 65: This is the age of eligibility for Medicare, and it's also considered to be "full retirement age" by many private and public-sector employers. However, keep in mind that this is not full retirement age for Social Security purposes.

It's important to note that even if you don't intend to file for Social Security benefits at age 65, you still need to apply for Medicare, which you can do at three months before you turn 65. This is important to do, simply because for every 12-month period you are eligible for Medicare Part B (medical insurance) and don't sign up, your monthly premium will increase by 10% unless you qualify for a Special Enrollment Period based on your or your spouse's health coverage at work.

Age 66 (or 67): Depending on the year you were born, your full retirement age for Social Security is between age 66 and 67. If you have a full retirement age other than 66, your benefit will still be decreased or increased for applying early or late at the same annual percentages in the chart above. That is, your benefit will decrease by 6.7% for each year you apply early, up to three years, and by 5% for each year beyond that. And, your benefit will increase by 8% for each year you delay collecting benefits beyond your full retirement age.

For example, if your full retirement age in the chart below is 66 years, 8 months, and you choose to wait until 67 years, 8 months, your benefit will increase by 8%.

If you were born in...

Your full (normal) retirement age is...




66 years, 2 months


66 years, 4 months


66 years, 6 months


66 years, 8 months


66 years, 10 months

1960 or later

67 years


Age 70: This age is significant for a couple of reasons. First, age 70 is the last age you can wait to file for Social Security benefits. Well, you can actually wait as long as you want, but there are no additional benefits to be had for waiting longer.

Second, at age 70-1/2, you'll need to start taking distributions from your retirement accounts if you haven't already done so. Based on the IRS's life expectancy tables, you can calculate the amount you'll need to take out at age 70-1/2 and every year beyond that age. This rule, known as required minimum distributions (RMDs) doesn't apply to Roth IRAs or other Roth accounts.

Finally, it's important to note that not all of these ages are significant for everybody. For example, when you reach age 59-1/2, you have the option of withdrawing money penalty-free from your retirement accounts, but that doesn't mean you should. These ages are important for you to know, but it's equally important to tailor your own retirement plan to fit your life and goals.

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