If you’ve not been able to save as much as you wanted due to other financial priorities, this is a great opportunity to catch up on your retirement saving. At age 50, you’re eligible to make “catch-up” contributions to 401(k)s and other employer-sponsored retirement plans. The Internal Revenue Service (IRS) “catch-up” contribution limits are adjusted annually. For 2021, the IRS allows you to contribute an additional $6,500 to your workplace retirement plan over the annual contribution limit of $19,500.
Once you reach age 59½, withdrawals from employer-sponsored retirement plans are no longer subject to the additional 10% federal penalty tax on early withdrawals — though you still may owe regular income tax on the distributions. But it’s generally better to leave your tax-advantaged retirement savings alone until you plan to begin taking distributions during retirement.
Age 62 is the minimum age at which you can choose to begin receiving Social Security benefits. Many people choose to take benefits early, for a variety of reasons. However, the math is pretty clear: claiming earlier gives you a reduced benefit and claiming later gives you an increased benefit. For each year you postpone taking this benefit (until age 70), your monthly check will be larger. Check out the Social Security Benefits Planner for more comprehensive information, including calculators and other resources.