Mapping Out Your Financial Future

estate plan, your financial future, Wheaton estate planning attorneysEstate planning and retirement planning tend to go hand in hand. Having a solid financial plan in place for your retirement also enables you to form certain elements of your estate plan, such as special needs trusts and living wills.

Financial advisors note key milestones that every person should be aware of when it comes to retirement planning. At each milestone, it is suggested that you take stock in what you have in place regarding your retirement funds and analyze any steps you need to take to remain on target.

Estate Planning Milestones

50 years old: When you reach this milestone, you are allowed to make what is referred to as "catch-up contributions" to both your individual retirement account as well as to your 401(k) account. Last year, the catch-up contribution for retirement accounts was $1,000, and for 401(k)s it was $5,500.

55 years old: Once you turn 55, you are allowed to begin taking early withdrawals from your 401(k), penalty-free. However, there are strict rules associated with these withdrawals—the accounts must be employer-established (not IRAs) and you must have worked for the employer up until you turned 55 years old.

59 and one-half years old: At the half-way point of your last year before hitting 60, you are allowed to take penalty-free withdrawals from both IRAs and 401(k) accounts. For those still working at this age, your plan administrator will be able to provide requirements on what is referred to as "in-service" withdrawals.

62 years old: This is the earliest age you can retire and collect Social Security benefits. However, keep in mind that the earlier you retire, the less your benefit will be. At 62, your benefit will be approximately 30 percent less than if you retire at this age.

65 years old: You can sign up for Medicare once you turn 65 years old. Also, if you have been contributing money to a health care savings account, you are now allowed to take money out for non-medical reasons without having to pay a penalty.

Between the ages of 66 and 67 years old: If you were born between 1943 and 1959, turning 66 means you have reached retirement age and can collect Social Security. For those born in 1960 or after, you reach your Social Security retirement at age 67.

70 years old: If you wait to retire until your 70th birthday, you will receive your full Social Security benefit.

Contact an Estate Planning Attorney

It is never too early to start planning your financial future for retirement. Contact the experienced Wheaton estate planning attorneys of Stock, Carlson, Flynn & McGrath, LLC at 630-665-2500 to schedule your consultation.