Financial Milestones at Each Age & Lessons From Granddad – Finger Financial Five #65

“Patience is not sitting and waiting. Patience is foreseeing. It is looking at the thorn and seeing the rose, looking at the night and seeing the day.” – Rumi

I feel Rumi was saying that time does pass. Enjoy the stage where you are now and do the work.  There are many stages and many things to do to get retired and stay retired. One of the biggest mistakes I see people make is in jumping stages. Let me explain by sharing a story….

I started fishing at my grandad’s farm outside Aynor, SC in Galivants Ferry.  He gave me a cane pole with a cork and hook.  He showed me how to bait the hook so the bait wouldn’t fall off.  Simple setup. Cork goes down, you got a fish. 

My grandad, my Papo, would fish with a rod and reel.  He was able to throw the bait farther and into spots where the bigger fish were.  I had to try it.  I spent all day trying to get my lure out of the tree and my line untangled.  Meanwhile, my grandmother, Mamo, would just pull in one fish after another with her simple cane pole.

Point is I needed to master the first level before going to the next level.  

In investing, many people do not have the basics down before they decide to start speculating.  They get themselves tangled up wasting time and money. Want a sure-fire way to know you are probably doing something right? It sounds boring.  Doing something wrong? You get an adrenaline rush.  

There are some boring financial milestones you reach as you age. Here is what to think about at each level:  

Age 50– You qualify for catch-up contributions, which allows you to add $1,000 more into IRAs and $6,500 more into 401k’s. Remember to adjust your contributions to maximize your deferral. 

Age 55– If Separated from Service (no longer working for the company that has your 401k), you may be able to withdraw money from your 401k, pay only ordinary income tax and avoid the 10% early withdrawal penalty. Good option to have available if you want to retire early. You also qualify for the  Health Savings Account catch-up option and can add $1,000 more. 

59 ½- Penalty-free IRA withdrawals available.  


  • In-service distributions
  • Roth IRA conversions
  • Asset allocation and portfolio positions to setup tax efficient retirement income generation

Age 62– First eligible for Social Security Benefits.  If you claim this early, you will have a 25% to 30% permanent benefit reduction.  You can also have withholding of Social Security income if you have earned income over a certain threshold.

Age 65– First eligible for Medicare Benefits. Check to see what options are best for you and your family. 

Age 66– Full Social Security benefits for some.  Consider delaying benefits to maximize your benefit amount at 70 years old. 

  • Adjust draw down strategies to be as tax efficient as possible
  • Possible Roth conversions
  • Review survivor benefits to make sure the claiming strategy is best for both spouses

Age 70- Maximum Social Security benefits. If you delayed benefits to 70, congratulations, you made it.    Benefits of delaying Social Security to 70 include:

  • Using lower income years from the day you retire to age 70 as an opportunity to do Roth conversions and pre-tax IRA withdrawals in low tax years. 

70 ½- You are now eligible for Qualified Charitable Distributions (QCD).  You can give money directly from your pre-tax IRA to charity. You won’t get a tax deduction, but won’t pay tax on the withdrawal. This can be more beneficial than giving cash to charity in that your gift may not be 100% deductible. You are limited to $100k per year. QCD’s can reduce your Required Minimum distributions when you turn 72.  

72- You are subject to Required Minimum Distributions for Traditional IRAs and pre-tax 401ks.  Click here to see a short video on how RMD’s work.  There is a minimum amount you must withdraw and the withdrawal percentage goes up each year. Because you are taking money from pre-tax accounts, your taxable income will likely go up. To offset this, you can: 

  • Do Qualified Charitable Distributions
  • Fund a 529 Savings plan for educational expenses for loved ones

I tried to keep it cane-pole simple, but ask me if you have questions. You can email me at [email protected] or CLICK HERE for a phone appointment. 

On the lighter side, I signed up for two events coming up: a 33 mile run in the desert in the beautiful Antelope Canyon and Ironman Texas in April. Here are a couple pictures of Antelope Canyon.

Hope all is well with you and your family,


P.S. You can register for upcoming webinars by clicking here and scrolling to the bottom of the page. Hit “register for our next free webinar”. 

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so you will have more clarity and peace and make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.


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