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Retirement planning comes with a surprising number of age-based rules and opportunities. Knowing what changes at each stage can help you avoid missed opportunities and costly surprises.

In this episode of Money Wisdom, Nicholas J. Colantuono, CFP® and Eric Hogarth, CFP® discuss the milestones that can shape when and how you make important financial decisions throughout retirement.

Age 50: Catch-Up Contributions

At age 50, you can start making catch-up contributions to your retirement accounts, such as 401(k)s and IRAs. Keep in mind that under current rules, you may need to make catch-up contributions to a Roth account depending on your income.

If you’re entering your higher-earning years, this can be a valuable way to increase your retirement savings. But make sure to consider these additional contributions within the context of your broader financial plan.

Age 59½: Penalty-Free Access and More Flexibility

Age 59½ is generally the age when you can make retirement account withdrawals without incurring an early penalty. If you’re still working, some employer-sponsored plans may also allow in-service withdrawals. This is where you can roll money into an IRA while continuing to contribute to your workplace plan.

IRA rollovers are not usually a taxable event when done properly, and they may provide more investment flexibility. That said, just because you have access to your money doesn’t mean you should automatically spend it. Taking withdrawals too early can reduce your future retirement income and may limit your options down the road.

Want practical guidance on preparing for retirement? Get your free copy of The People’s Retirement Handbook by texting “BOOK” to 800-757-0436.

Ages 73 or 75: Required Minimum Distributions

Required minimum distributions (RMDs) begin at age 73 or 75, depending on your birth year. The IRS requires you to take RMDs from your pre-tax accounts because you haven’t paid taxes on that money yet. If you do not take the correct amount, you may face significant penalties.

You should start planning for RMDs before you reach RMD age. Waiting until RMDs begin may force larger taxable withdrawals later. This can potentially increase your taxable income, Medicare premiums, and the taxation of other income sources. Strategies such as Roth conversions or planned withdrawals before RMD age may help manage your tax burden over time.

Age 62 to 70: Social Security Decisions

You can generally file for Social Security as early as age 62 for a reduced benefit. You can also wait until full retirement age (between 66 and 67) to receive your full benefit. And for the maximum payout, you can delay benefits until age 70. The right claiming age will depend on your income needs, work status, health, marital status, and broader retirement plan.

A common mistake is spending down your personal savings simply to delay Social Security without considering the trade-offs. Another mistake is claiming early when it is not financially necessary or when penalties may apply. You should base your Social Security decision on your full retirement income picture, not a single rule of thumb.

Age 65: Medicare Eligibility

The standard Medicare eligibility age is 65. Generally, you must sign up for Medicare during your Initial Enrollment Period. This is a seven-month window that starts three months before the month you turn 65, includes your 65th birthday month, and ends three months after that month.

Some retirees pay relatively little for Medicare coverage, while others face much higher expenses. When evaluating your Medicare needs, it’s important to compare options and build realistic healthcare costs into your retirement plan.