A core aspect of retirement planning is knowing the specific ages that trigger benefits eligibility and the age cutoffs that end eligibility.
Retirement age is a fluid thing. If you're extremely successful, you might retire at 40 or 50. Those on the other end of the spectrum may find retirement elusive even after they enter their golden years.
Most retirement programs either run by or associated with the government typically have hard and fast age-related milestones, however. Knowing what these numbers are - and how they govern access to retirement programs - is key for successful retirement planning.
Age-Based Benefits To Know
One of the most effective tax-advantaged retirement savings vehicles is the Individual Retirement Account or IRA. An IRA works much like a 401k, as it allows you to save money for retirement by making tax-deductible contributions.
There is a limit to the tax advantage, however - six months after you turn 70, you are no longer eligible to make tax-deductible IRA contributions.
Medicare, the U.S. government's federal healthcare insurance for seniors and the disabled, also has defined age eligibility requirements. You must typically be 65 to qualify for Medicare coverage, though you may qualify at 62 if you've been on disability benefits for at least two years.
Social Security, a federal retirement benefits program that serves roughly 60 millions Americans, has the most complex age-related requirements. The full retirement age for Americans born between 1943 and 1960 is 66. If you were born after 1960, your full retirement age is 67. This when you become eligible for your full benefit.
There are a few other important wrinkles, however. You may claim Social Security benefits as early as 62. You'll receive a lower payment by doing so, though - those starting payments at 62 will only receive 75-percent of their full payment if their full retirement age is 66. If you wait until 65, you'll receive about 93-percent of your full payment.
You may also delay payment until the age of 70, potentially increasing your benefits by more than 30-percent. Whether or not this makes sense financially depends on how long you live.
The Takeaway
Knowing the specific ages that trigger eligibility - and the age cutoffs that end eligibility - is a core aspect of retirement planning. Review this information closely with a qualified advisor when planning for your retirement.
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