The 9 Key Milestone Ages in Retirement

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"The days are long but the years are short" is often said by parents, but it's also a phrase that very much applies to the time between starting your first 'real' job and the day you retire. Life takes over and it's a flurry of activity; marriage, having kids and buying a home are all important milestones for many people. There are also a series of milestone ages on your way to retirement that are important to know about as they open up opportunities to save more, avoid penalties, and qualify for benefits. And two of these milestones require you to either act or be subject to additional taxes and/or penalties.

The SECURE 2.0 Act has significantly changed retirement savings rules in recent years. Those changes include, but are not limited to: a new required minimum distribution (RMD) age and increased catch-up contributions for those aged 60 to 63.

Take note of these nine milestone ages on your way to retirement. You don't want to miss any of these opportunities or important deadlines.

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1. Age 50: You can make catch-up contributions to your retirement accounts

Why make so-called catch-up contributions? If a job loss or another life event caused you to dip into retirement savings, you took time off to be a caregiver, your previous earnings were insufficient or your anticipated income needs in retirement have increased, you may want to make catch-up contributions. And these contributions could also lower your taxable income and potentially reduce your overall tax liability.

Age 50+ catch-up contribution limits 2025 and 2026

401(k), 403(b), SARSEP and 457 (b) and SIMPLE 401(k) catch-up amounts. For 2025, the standard annual deferral limit for 401(k), 403(b), SARSEP and 457 (b) plans is $23,500 ($24,500 in 2026), and the catch-up contribution limit for those age 50 and older is $7,500 (up $500 in 2026 to $8,000). That means an active participant 50 or older can contribute up to $31,000 in 2025 and $32,500 in 2026.

IRA catch-up amounts. You can make catch-up contributions to your traditional or Roth IRA up to $1,000 ($1,100 in 2026). Catch-up contributions to an IRA are due by the due date of your tax return, not including extensions.

SIMPLE plan catch-up amounts. The catch-up contribution limit for employees 50 and over who participate in SIMPLE 401(k) plans remains $3,500 for 2025 ($4,000 in 2026). So the total you can contribute is $20,500 in 2025 if you are older than 50. In 2026, the total contribution limit for those age 50 and over is $21,000.

New rule for high earners starting in 2026. This new rule requires that certain high-income earners must make their age 50 and older catch-up contributions to their 401(k), 403(b) or governmental 457(b) plans on a Roth or after-tax basis.

If you are a high earner, with over $150,000 in FICA wages in 2025, and are 50 or older, you will no longer be able to deduct your catch-up contributions from your current year's taxable income in 2026. That income threshold will be adjusted for inflation in the future.

For affected high-earners, any catch-up contributions — $8,000 in 2026 (up $500 from $7,500 in 2025) —made to their employer-sponsored plan must be designated as Roth or after-tax contributions.

Hand burning 55 birthday candles with a lighter

2. Age 55: Penalty-free 401(k) withdrawals (aka the rule of 55)

The rule of 55 could be an integral part of your retirement plan if you plan to retire early; it allows you to withdraw money from your current employer-sponsored 401(k) or 403(b) plan without incurring the 10% penalty for early withdrawals. However, the money in your other retirement accounts must stay put until you reach age 59-½ if you want to avoid the early withdrawal penalty.

You must leave your job when you’re 55 or older, and your plan must allow you these withdrawals in order to take advantage of the rule of 55. These distributions will still count as taxable income as they would at any age you made the withdrawal.

And remember that the rule of 55 does not apply to 401(k) or 403(b) funds that have been rolled over into an IRA. Once funds are rolled over into an IRA, they are subject to the standard IRA withdrawal rules, which generally allow penalty-free withdrawals beginning at age 59-1/2.

Wooden toy blocks forming the number 59.

3. Age 59-1/2: No more early withdrawal penalty for retirement account distributions

The 59-1/2 rule imposes a 10% penalty on early IRA or 401(k) withdrawals made before you reach age 59-1/2. There are some hardship exemptions from the rule and you can learn more about them on the IRS web site.

There is one way around this rule, you can take substantially equal periodic payments (SEPP) and not be subject to additional penalties. This option would work well for someone planning to retire early. It is not without risk. Once made, you are basically locked into this choice. Modifying your payment schedule could trigger the 10% penalty, for violating the 59-1/2 rule, and a recapture tax.

Roth IRA accounts are different. You can withdraw your contributions (but not your earnings) at any time, without taxes or penalties and unlike traditional IRAs, Roth IRAs aren’t subject to RMDs during the owner’s lifetime.

After age 59-1/2, if the account has been open for at least 5 years, you can withdraw both contributions and earnings tax-free and penalty-free. However, if you withdraw your earnings before the age of 59-1/2 or before the account has been left open for 5 years, you may owe income taxes and a 10% penalty.

invitation and congratulations to 60th birthday

4. Age 60: You can make "super" catch-up contributions to your retirement accounts

This is the first year that "super" catch-up contributions are allowed, enabling those aged 60-63 to make higher 401(k) catch-up contribution limits. If you’re 60, 61, 62, or 63 in 2025, you can use this new rule to increase your 401(k) savings for retirement. For 2025, the catch-up limit for individuals aged 50 and over is $7,500 ($8,000 in 2026), and the higher catch-up contribution limit for those aged 60-63 remains at $11,250 (unchanged for 2026).

The super catch-up contribution limit for SIMPLE IRAs is $5,250 for 2025, resulting in a total contribution limit of $21,750, which still lags behind 401(k) limits. In 2026, the super catch-up limit is unchanged, and the total contribution limit will be $22,250.

To qualify for the super catch-up contributions, you must meet specific criteria: be 60, 61, 62, or 63 on December of the calendar year, and generally, have already contributed the maximum deferral amount. Once you turn 64, your contributions revert to the standard age 50+ catch-up limit.

Number 62 made with sparklers on black background

This is the earliest age you can begin receiving a benefit, but only a reduced amount. Claiming Social Security before your full retirement age (FRA) will reduce your benefits by almost 30%, says the Social Security Administration.

Age isn't the only factor in determining when you should take Social Security. Your health, financial need, desire to leave work, current need for more money and concerns about solvency of the Social Security trust find are among the reason some may decide to take a reduced benefit at 62.

Benefits are reduced by 5/9 of 1% for each month before your FRA, up to 36 months. If the number of reduction months exceeds 36, then your benefit is further reduced 5/12 of one percent per month.

You can substantially boost your Social Security check by delaying collection of your benefits. You can also wait as late as age 70 to start collecting Social Security benefits and earn delayed retirement credits for every month after you wait after your FRA. You can increase your benefits anywhere from 24% to 32%, depending on your FRA, by waiting until 70 to collect benefits.

The Social Security website has a calculator you can use to estimate the impact of early and delayed retirement.

Coconut birthday cake on blue background with burning candle number 65 and many colorful sprinkles.

6. Age 65: You are eligible for Medicare

Be careful not to overlook your Medicare eligibility. If you decide to delay your Social Security benefits until after age 65, you should still apply for Medicare benefits within three months of your 65th birthday. When you turn 65, your initial enrollment period lasts for seven months, beginning three months before you turn 65.

If you wait longer, your Part B Medicare medical insurance and Part D prescription drug coverage may cost you more money. Even if you can buy employer-provided insurance, you can enroll while working when you turn 65.

Automatic enrollment in Medicare. When you apply for retirement or disability benefits from Social Security (or the Railroad Retirement Board), it also serves as your application for Medicare. If you are approved for benefits, you’ll automatically get Part A coverage once you’re eligible for Medicare.

And if you’re getting benefits at least 4 months before you turn 65, you’ll automatically get Part A coverage and also be signed up for Part B. Because you pay a monthly premium for Part B coverage, you can choose whether to keep it or not.

When you have employer coverage at 65 and after. You can wait until you (or your spouse) stop working, or lose your health insurance, to sign up for Medicare Part B Medical Insurance, and you won’t pay a late enrollment penalty

Once you stop working, or lose your health insurance, you have an eight month Special Enrollment Period (SEP) when you can sign up for Medicare. The SEP starts when you stop working, or lose insurance, even if you choose COBRA or other coverage that’s not Medicare..

This SEP qualifies you to delay enrolling in Medicare Part B without having to wait for a General Enrollment Period (GEP) and paying the penalty for late enrollment.

For free, one-on-one help including: choosing a plan, reviewing coverage or understanding costs, contact your local State Health Insurance Assistance Program (SHIP) for free, unbiased assistance.

Number 66 in s silver tone metal and number 67 on a wooden door.

Your full retirement age is the age at which you become eligible for full benefits, without any reductions.

Your full retirement age depends on the year you were born.

Born between 1943 and 1954, your FRA is 66
Born in 1955, your FRA is 66 and two months
Born in 1956 and 1959, your FRA is 66 and four months
Born in 1957, your FRA is 66 and six months
Born in 1958, your FRA is 66 and eight months
Born in 1959, your FRA is 66 and ten months
Born in 1960 or after, your FRA is 67.

That meant that people born in 1959 could receive their full benefits starting September of this year.

If you've waited until 70 to collect Social Security, you'll now collect the biggest monthly benefit possible. This amount is anywhere from 54% to 62% more than if you had started collecting your benefit at 62. How is that the case? Well, as discussed above, you'll lose almost 30% of your benefit if you collect at age 62. If you wait until age 70, you get any payments for delayed retirement credits that can increase a check by 24% to 32%, depending on your FRA.

Red metal number seventy-three on a the wall

9. Age 73: You must begin your required minimum distributions or face penalties

You've reached the peak of the retirement savings mountain and descending to the distribution phase. At age 73, you are bound to begin taking required minimum distributions (RMD) from your IRAs and employer retirement plans or face some hefty penalties.

The distributions will vary from year to year based on the value of the accounts and your age. Next you'll have to decide whether to invest, spend or donate the RMD income.

Milestones are stepping stones in retirement

Important retirement decisions start well before you reach 65. By tracking your pre-retirement and retirement milestones, you can maximize your savings by taking advantage of catch-up contributions and avoid extra charges by applying for Medicare when you are eligible. Mark these eight important milestones on your calendar, so you remain aware of all of your opportunities and obligation as they arise.

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Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation. She is a graduate of Brooklyn Law School and the University at Buffalo.