Your Major Money Milestones in Retirement and How to Take Action

Updated: April 21, 2026

When a birthday or big life event occurs, you may bake a cake or make a dinner reservation to mark the occasion. If you’re age 50 or older, you might also want to call your financial, tax, and legal professionals. That’s because this is a good time to revisit financial plans and make decisions that could help you reach your personal and retirement goals.

Many people approaching retirement have similar questions about timing and financial readiness, including concerns about no longer receiving a steady paycheck, adjusting to a new lifestyle, and ensuring retirement savings will last. Preparing for retirement often involves taking steps like eliminating debt, reducing housing expenses, and meeting with a financial professional. While every situation is unique, being proactive about planning for retirement can help create a stronger foundation for this new chapter.

As you grow older and get closer to retirement, one component to consider is what’s known as legislative birthdays. These are age-based milestones that trigger financial decisions and present choices that could affect retirement income. Take a look at these legislative birthdays and other major milestones to see what you can do to make the most of these significant life events.

Turning 50

 

Consider celebrating this occasion by making catch-up contributions to select IRAs and qualified retirement plans. The catch-up provision was created by the Economic Growth and Tax Relief Reconciliation Act of 2001 so that older individuals would be able to set aside additional savings for retirement.

Thanks to tax deferral of potential earnings, catch-up contributions can potentially make a big difference in how much income you’ll have in retirement. Tax rules and contribution limits may change and will vary based on the individual’s situation. Clients should consult with a qualified tax professional and can find additional information at IRS.gov.

Age 50 can be an opportune time to reassess your retirement savings strategy and take advantage of higher contribution limits. Even if you’ve been contributing regularly to your retirement accounts, the additional catch-up contributions could help you reach your retirement goals.

What to do: Contact your financial professional or plan administrator to learn more about catch-up contributions.

Turning 55

 

Generally, you have to wait until age 59½ to avoid an additional 10% federal tax penalty on early distributions for tapping into a 401(k) and some other retirement savings accounts. However, if you stop working for your employer the year you turn 55 or after (some public safety workers are eligible after they turn 50), you may be able to tap into certain employer-sponsored retirement savings accounts without incurring the penalty, thanks to what is known as the Rule of 55. The Rule of 55 applies to qualified retirement plans, including 401(k), 403(b), and 501(a) plans, but not IRAs or plan balances you may have with previous employers.² In general, to take advantage of the Rule of 55, you must withdraw the money while it’s still within your company’s retirement plan rather than after you roll it over into an IRA.

What to do: Be sure to speak with your tax, legal, and financial professionals to discuss how withdrawing money now could affect your future goals.

Becoming an Empty Nester

 

For parents whose children have grown up and moved out, there may be an opportunity to make lifestyle changes, such as downsizing, relocating to your dream city, or taking up a new hobby. This stage of life could be a good time to travel, pursue interests you’ve put on hold, and enjoy the freedom that comes after years of active parenting.

From a financial standpoint, empty nesters should envision what they want their retirement to look like and analyze their future cash flow situation based on what they know now.

What to do: Communicate with your partner or family members to ensure that you’re on the same page about lifestyle goals.

Turning 59½

 

Half birthdays can also signal important events that have income and tax consequences. Turning 59½ may make you eligible to start withdrawing money from annuities, IRAs, and qualified plans without the 10% tax penalty mentioned earlier.

What to do: In addition to your tax and legal professionals, talk with your financial professional about how withdrawing money now could affect future cash flow and taxes.

Pursuing Your Passions or New Professional Opportunities

 

You may find yourself wanting to develop new skills or nurture an interest you’ve had for years. Perhaps you want to cut back on your work hours to have more time for volunteering, or maybe you’d like to start your own business.

What to do: Reach out to others in the field for advice on the best way to get started. If you’re still working full time, see if your employer would offer a sabbatical or will support you taking classes to learn a new skill.

Turning 62

 

You may be eligible to take Social Security, but there’s more to consider before you begin collecting benefits. Generally, you will receive a reduced benefit if you begin taking Social Security benefits prior to reaching your full retirement age as defined by the Social Security Administration (which is based on your year of birth). Waiting a few years beyond full retirement age increases your benefit by 8% per year until age 70, when the increase stops.³

The decision of when to take Social Security depends on your individual circumstances. Some people plan to delay benefits to receive larger future payments, while others may need to take benefits earlier due to health concerns, job loss, or other financial considerations.

Key factors to consider include your current financial resources, health condition, life expectancy, whether you have other sources of retirement income such as pensions or retirement savings, and rising health care and living expenses. With careful planning and financial discipline, either approach can work depending on your situation.

What to do: Everyone’s financial needs are different, so talk to your tax, legal, and financial professionals about when you should consider taking Social Security benefits. You can learn more about your benefit levels by visiting www.ssa.gov.

Turning 65

 

For most individuals, this is the year you become eligible for Medicare. If you’re retired and don’t sign up for Medicare Part B during your initial enrollment window, you’ll face a 10% increase in Part B premiums for every year-long period you’re eligible for coverage but don’t enroll.⁴ If you’re still working, the size of your employer plan determines whether you need to enroll.

What to do: Contact your local State Health Insurance Assistance Program, which is not connected to an insurance company or health plan, for information and help with choosing a Medicare plan.

Becoming a Grandparent

 

You could consider helping your new family member start on firm financial footing by opening a 529 college savings plan in the child’s name.⁵ These tax-advantaged savings plans are designed to encourage saving for future education costs as earnings grow free of federal tax.

Other options for grandparents include setting up a UTMA or UGMA account, which are custodial accounts established by the Uniform Transfers to Minors Act and Uniform Gifts to Minors Act. While you serve as the custodian, the child is the account holder.

What to do: Talk to your tax, legal, and financial professionals about which account type is right for you and your family.

Turning 70

 

At age 70, you must begin to collect Social Security benefits if you haven’t already started. By delaying until now, you will receive the largest possible benefit. If you choose to keep working, you can do so while collecting full benefits. Remember that benefits may be taxable depending on your income, so be sure to speak to your financial, tax, and legal professionals for more information.

What to do: Apply for retirement benefits with the Social Security Administration.

Turning 73⁶

 

Generally, you must start taking required minimum distributions (RMDs) from your tax-deferred retirement accounts if you aren’t already doing so. This can feel unnatural after a lifetime of working, investing, and saving. You must take your first RMD by April 1 of the year after you turn 73, and subsequent RMDs must be taken annually by December 31. If you wait to take your first distribution until April 1, you generally will need to take two distributions – one for the first RMD year and one for the second. With some exceptions, penalties for not taking these distributions can be as high as 25% of the required distribution amount. Tax and financial professionals can help you calculate your RMDs.

What to do: Contact your plan’s custodian or your financial professional ahead of time to make arrangements and speak to your tax and legal professionals.

Download our legislative birthdays worksheet to keep as a handy reference that can help you and your financial professional make informed decisions during these major milestones.

Download Worksheet