When we think of financial planning, we tend to think of saving money and investing it wisely. But financial planning involves many more aspects of your life, such as making important decisions, Most of these decisions are dependent upon a deadline, so mark these dates on your calendar.
December 31. You must make retirement plan contributions by December 31 of each year, in order to claim the maximum credit on that year's income tax return. Reaching the maximum allowable contribution each year is one of the best ways to prepare for a stable retirement.
April 15. This is the deadline for filing your tax return each spring, but it's also the deadline for making IRA contributions that you want to count on that tax return.
Your 62nd birthday. When you turn 62, you can claim your Social Security benefits. However, because you're claiming your money before full retirement age, your payments will be permanently reduced by about 25 percent of their full amounts. In some cases this is still a good idea, but be sure of your decision since it will be permanently.
Your 65th birthday. When you turn 65, you are eligible for Medicare benefits. You can apply three months prior to your birthday, and this enrollment period continues for four months after that date. Make sure you enroll in Medicare during this window of time; otherwise, you will be charged higher Medicare premiums for the rest of your life.
October 15 to December 7. Once you've enrolled in Medicare, that's not the end of your decision-making process. During Open Enrollment each fall, you can make changes to your plan or enroll in a supplemental plan. Every year you should evaluate the previous year's medical spending, anticipate your needs for the next year, and make the changes that will benefit your budget.
Age 70 ½. Many people wait as long as possible to begin taking distributions from their retirement account. This allows the money to continue growing, and can provide for a more generous retirement income when distributions do begin. However, you must begin taking required minimum distributions (RMD) during the year that you turn 70 ½, or you will face a penalty. Since this might mean that you take two RMDs during the first year, plan this decision carefully with your financial advisor. You might push yourself into a higher income tax bracket.
If you have questions, or need help making any retirement-related decisions, call our office to schedule an appointment. We can analyze your situation and help you make the choices that are right for you.
This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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