The 6 Retirement Milestones That Matter Most
When one of our clients turned 59½, they didn’t throw a party. But they did check in with their advisor. They’d been eyeing an early retirement and wanted to know what that “half-birthday” actually unlocked.
Like many people, they assumed retirement accounts were off-limits until age 65. Not so.
Understanding how age impacts your benefits, taxes, and financial options is one of the most effective ways to strengthen your retirement plan.
While every situation is unique, these six milestone ages consistently shape a strong retirement strategy.
Disclaimer: The recommendations or suggestions below may not be appropriate for everyone. Please consult your financial advisor and CPA to understand how these apply to your specific situation.
MILESTONE #1: Age 59½: Penalty-Free Access to Retirement Accounts
This milestone opens the door to withdrawals from IRAs, 401(k)s, and 403(b)s without the 10% early withdrawal penalty.
For those considering an early retirement, this age is especially important. Before reaching it, retirees often rely on alternative sources of income, such as brokerage savings or structured withdrawal strategies.
A few common approaches for accessing funds before 59½ include:
Building savings in taxable accounts for flexible withdrawals
Exploring the 72(t) Substantially Equal Periodic Payment strategy
In some cases, accepting the early withdrawal penalty when it aligns with broader goals
The best approach depends on planning early and understanding how different accounts work together.
MILESTONE #2: Age 62: The Earliest Social Security Claiming Age
At 62, Social Security becomes available but taking it early comes with long-term considerations. Benefits are reduced (typically to about 70% of the full amount), and if you’re still earning income, the earnings test may temporarily reduce your payout.
Some retirees benefit from claiming early, while others may gain more by waiting. A break-even analysis created by your Spokane financial advisor can help clarify whether an early or delayed strategy fits your longevity expectations and income needs.
MILESTONE #3: Age 65: Medicare Begins
Healthcare is one of the most significant retirement expenses, and Medicare eligibility at 65 brings welcomed stability. Your enrollment window begins three months before your birthday month and extends three months after.
Here’s a simple breakdown:
Part A: Inpatient care; typically premium-free
Part B: Outpatient care; standard premium applies
Parts C & D: Advantage and prescription coverage; varies by plan
Your income from two years prior determines whether IRMAA surcharges apply, which makes long-term tax planning especially valuable during your early 60s.
MILESTONE #4: Age 67: Full Retirement Age (FRA)
For most people born in 1960 or later, full retirement age arrives at 67. Claiming Social Security at this stage avoids the earnings test, allowing you to work without benefit reductions.
It’s also a time when many retirees start to think about streamlining their financial life. Medicare premiums can be automatically deducted from benefits and optional tax withholding can make budgeting easier.
Coordinating Social Security, healthcare, and withdrawal strategies around this age often leads to a more stable long-term plan.
MILESTONE #5: Age 70½: A Key Age for Charitable Giving
At 70½, retirees can begin making Qualified Charitable Distributions (QCDs) directly from an IRA to a qualified charity. QCDs are entirely tax-free and can reduce taxable income, which may help manage Medicare premiums as well.
For those who already give regularly, this strategy becomes a highly efficient way to support causes they care about while benefiting their overall tax picture.
MILESTONE #6: Age 73: Required Minimum Distributions Begin
Required Minimum Distributions (RMDs) start at age 73 (or 75 for those born in 1960 or later). These mandatory withdrawals from traditional retirement accounts increase taxable income and grow each year based on IRS life expectancy tables.
While delaying your first RMD until the following April is allowed, it often results in two withdrawals in the same year—something that can push income into a higher tax bracket.
Many retirees benefit from planning ahead through strategies such as Roth conversions, staggered withdrawals, or charitable giving.
Planning Retirement by Milestone, Not Just by Date
Whether you plan to retire around age 55, 65, or 75, understanding these milestone ages can help guide retirement decisions about income, taxes, healthcare, and charitable planning.
Reviewing your options with a trusted financial advisor can help you make the most of each opportunity and build a retirement aligned with your goals and values.
This article was prepared for the Spokane Financial Advisors Network by Quantum Financial Planning and is educational in nature. For personalized guidance, reach out to your financial advisor.
