Milestone Ages

For most children, birthdays are a big deal, met with eager excitement. However, as we age, birthdays become less sig- nificant, perhaps just another day to count gray hair. There are several important ages that have financial planning impli – cations and considerations which are outlined in this article. While the details and nuances of these ages are beyond the scope of this article, this should offer the reader a general idea of some of the important milestone ages when it comes to per – sonal finance.

• Teenage: This first age isn’t an age but rather an event, often happening in one’s teenage years. When one has earned income (wages, tips, etc) they become eligible to make con – tributions to an Individual Retirement Account (IRA). There is no age limit or restriction in funding an IRA, only that that individual has earned income.

• 21: This is the age of majority in Wisconsin as it relates to Uniform Transfers to Minor (UTMA) accounts. This is the age at which these accounts need to be transferred over to the once minor’s control. • 50: Beginning in the year you turn 50, additional “catchup” contributions can be made to retirement plans. A base contribution limit is available on retirement accounts but ad – ditional contributions can be made for those age 50 or better. • 55: Similar to retirement accounts, the year one turns age 55, they can make additional “catch-up” contributions to Health Savings Accounts (HSA). • 59 ½: Starting at this age, there is no penalty for early withdrawal from most retirement accounts. • 62: At this age, one can choose to begin to collect social security retirement benefits (in most cases).

• 65: This is when most people become eligible for Medi –

care which is the federal health insurance program. • 70: This is the latest age at which one would begin to col – lect social security retirement benefits. Essentially there is no additional benefit in delaying to collect social security benefits beyond this age.

• 70 ½: This is the age at which one can make Qualified Charitable Distributions (QDCs) from an IRA.

• 72: In general, this the age at which minimum distribu –

tions from certain retirement accounts must begin. These Re – quired Minimum Distributions (RMDs) must continue every year beyond this age.

• 85 to 95: This is commonly the range of ages in which deferred annuity payments must begin. This specific age (or sometimes date), is known as the commencement date, and is company and contract specific.

Wise financial decisions know no starting age. Personal finance evolves throughout ones life but certain ages will have an impact on those financial decisions and actions. Adam Smit is CERTIFIED FINANCIAL PLANNER™ and a registered principal of LPL Financial. This article is for general information only and not intended to provide specific advice or recommendations for any individual. Securities of –

fered through LPL Financial. Member FINRA/SIPC.