The exact age at which you can receive your full retirement benefit depends upon the year of your birth. People that were born between 1943 and 1954 become eligible at the age of 66.It then goes up by two months per year until 1960 when it tops out at 67 years of age.You do not have to wait until you reach this age to start to collect a benefit. If you are willing to accept a reduced benefit, you can file for your benefit when you are as young as 62. Depending on the year of your birth, the reduction would be somewhere between 25 percent and 30 percent. It is also possible to go in the other direction and delay the submission of your application for your benefit. You earn delayed retirement credits when you do this, and your benefit increases by 8 percent for every year that you delay.However, the delayed retirement credit accrual stops when you celebrate your 70th birthday. For this reason, there is no motivation to delay beyond that point.
When the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was passed, some new rules for individual retirement account holders were established. The primary difference is the way that taxes are paid. With a Roth individual retirement account, the contributions are made after taxes have been paid on the income. The reverse arrangement is in place with a traditional IRA. You can start to accept penalty free withdrawals from either account when you are 59 ½ years old. There is never any mandatory minimum distribution required when you have a Roth account. If you have a traditional IRA, you have to start taking distributions when you are 72 years of age. After the SECURE Act was enacted, the rules were changed to allow traditional IRA holders to be able to contribute more money into the account indefinitely. In the past, contributions had to stop when an account holder reached the age of 70 ½. There has never been any age limit for contributions into a Roth account. The distributions would be taxed if you have a traditional account, but distributions from a Roth individual retirement account would not be subject to regular income taxes.
Distributions from a Roth IRA to the beneficiary are not taxed, but traditional individual retirement account distributions must be reported. All of the money in either type account must be distributed to the beneficiary within 10 years of the transfer. This is another detail that was changed when the SECURE Act was put into place. Account holders were previously allowed to take mandatory minimum distributions for an open-ended period of time. There was no ten-year mandate.
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We have provided some basic information on this page, and it is definitely important to include retirement planning as part of your long-term strategy. A well devised plan will address the twilight years that follow the active retirement period, and it will culminate with your estate plan.
These phases are interconnected, so comprehensive planning is key. Personalized attention is important, and this is exactly what you will receive when you work with our firm.
If you would like to set up a consultation appointment, we can be reached by phone at 585-374-5210. There is also a contact form on this website that you can use to send us a message.