Welcome to Financial Legacy SolutionsAfter years of hard work, retirement has finally become an option now that you can collect Social Security and are entitled to Medicare, along with any other perks of becoming a senior citizen. Thoughts of relaxing, taking those trips you have been planning, getting to spend more time with the grandchildren, working around the house, or so you thought. We all have our own version, of what we hope our retirement will look like. Whether retirement is miles down the road or at your door step; you may be asking yourself a lot of questions. What can I do you better prepare for retirement? Have I saved enough? Will I be able to enjoy the same life styles without, or will I out live my money? What health plans is right for me and will I be able to afford future health issues? The two biggest concerns for most seniors are picking the right health plan and being able to sustain financially.
Important Dates and Cutoffs Age 50: Now you can put away more money in your 401(k) and IRAs. If you are over 50 you can defer $23,000 in your 401(k) and $6,500 in your IRA or Roth IRAs in 2013. Age 55: If you retire, quit or lose your job, you can access your 401(k) penalty free. Also, Public Safety employees can take their benefits at age 50 or later and avoid the 10% penalty. Age 59 1/2: The 10% early withdrawal penalty disappears. Even those there is no penalty, income taxes still apply on IRA and 401(k) withdrawals. Age 62: This is the earliest age for Social Security eligibility. Keep in mind your payments will permanently be reduced to that amount. In addition, if you work and collect Social Security benefits at the same time, you could be subject to part or all of your payments being temporarily withheld. Age 65: Time for Medicare! You can sign up as early as 3 months before, the month of and 3 months after your 65th birthday. If you don’t sign up right away, Medicare Part B and Part D premiums could permanently increase. Your monthly Part B premiums will increase by 10% for each 12 month period that you wait. You also have a six-month enrollment period to pick any Medigap policy your state without having to answer any health questions. Once this period ends, you could be denied coverage or face higher costs. New Medicare enrollees are eligible for a free preventative care doctor’s visit during the first 12 months they have Medicare Part B. Age 66: Eligible for full Social Security benefits if born between 1943 and 1954. Age 70 1/2: At this age you are required to withdraw money from traditional IRAs and 401(k)s, and you must pay income tax on each withdrawal. If you don’t take your distribution there is a penalty on the amount you didn't withdraw. If you are still working past age 70 1/2 you can delay distributions from your current 401(k), but not IRA, until April 1 of the year after they retire (unless they own 5 percent or more of the company sponsoring the plan). People age 70 1/2 and older are also no longer eligible to get a tax deduction for traditional IRA contributions. |
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