Greetings!
There are so many birthdays in the summer that we wanted to share some financial tips for different ages. And while this newsletter might not serve as a good substitute for a gift, you are still welcome to share it with a friend who has a big birthday coming up.
Happy birthday, whenever it may be!
Cass, Megan and Bleckley
Age has its benefits
Here are a few birthdays to keep in mind from a financial point of view. If you would like to explore any of these further, please contact the Watercolor Financial Group team so that we can help you make the most of your stage of life.
-- Age 55 --
The IRS Rule of 55 allows an employee who is laid off, fired, or who quits a job between the ages of 55 and 59 1/2 to take money from their 401(k) or 403(b) plan without the 10% penalty for early withdrawal. This is designed to give early access to retirement assets for folks who are near retirement age.
-- Age 59 ½ --
Should I start spending my IRAs? Not necessarily. The rule states that you can take distributions out of your IRAs after age 59 1/2 without a 10% penalty. You will still owe income tax on this money. As mom used to say, “just because you can, doesn’t mean you should.”
-- Age 65 --
Turning 65 is a big deal, financially speaking! Please click here to read updates about Medicare and property tax breaks.
-- Age 70 --
I turned 70 before July 1, 2019.
You will need to take a Required Minimum Distribution (RMD, sometimes called an MRD – Minimum Required Distribution) this year.
I will turn 70 this year.
Anyone turning 70 after June 30, 2019 is able to delay their RMD until April 1 of the year after you reach age 72.
Consequence for failing to take required minimum distributions.
If you do not take your full required minimum distribution, you may have to pay a 50% penalty on the amount not distributed as required.
-- Age 100 --
Do I have to start taking withdrawals on my Roth? No. Roth IRAs do not require withdrawals until after the death of the owner. Roth IRAs can be a great way to transfer wealth to your children and grandchildren.
