Rolling a 529 Into a Roth IRA

A newer rule allows leftover college funds to become part of your retirement plan. That’s a big shift, especially for families who over-saved.
Here’s what matters:
• The 529 account must be open for 15 years before a rollover is allowed.
• You can roll up to $35,000 from the 529 into a Roth IRA.
• If a student receives scholarships, you can withdraw the same amount from the 529 without the 10% penalty.

Age 50: Catch-Up Contributions Begin

At age 50, you’re finally allowed to put more toward retirement and these extra amounts can dramatically increase your savings in your final working years.
Catch-up limits include:
• $7,500 extra toward your 401(k)
• $1,000 extra toward your IRA or Roth IRA
If you’re behind on your savings, this age is a major turning point.

Age 59½: Penalty-Free Withdrawals

This is when the government lets you tap into retirement accounts without the 10% early withdrawal penalty.
You can now withdraw from:
• Traditional IRA
• Roth IRA (if you’ve met the 5-year rule)
• 401(k) and 403(b) accounts
You’ll still owe taxes on traditional accounts, but the penalty is gone giving you more flexibility during your transition into retirement.

Ages 62–70: Claiming Social Security

Your Social Security strategy can dramatically affect your lifetime income.
Here’s how the ages break down:
• 62 — earliest you can claim, but benefits are permanently reduced
• 66–67 — full retirement age, depending on your birth year
• 70 — maximum monthly benefit if you delay claiming
The later you claim, the larger your monthly check but the right choice depends on your health, income needs, and long-term plan.

Age 65: Medicare Eligibility

Healthcare becomes a major cost in retirement, and Medicare helps manage those expenses.
Here’s what to know:
• You become eligible at age 65
• Missing your enrollment window can create lifelong penalties
• Even if you’re still working, you may need to coordinate Medicare with employer coverage
This is one age you cannot afford to ignore.

Age 73: Required Minimum Distributions (RMDs)

Once you reach age 73, the IRS requires you to start withdrawing from your tax-deferred retirement accounts. This is how the government finally collects taxes on money you saved earlier in life.
RMDs apply to:
• Traditional IRAs
• 401(k), 403(b), and similar plans
Failing to take your RMD can lead to steep penalties, so planning ahead is essential.

Why Starting Early Matters at Any Age

No matter where you are right now, the most important rule in retirement planning is simple: start investing as soon as you can.
A good foundation includes:
• Paying off high-interest debt
• Building an emergency fund
• Saving 15% of your income for retirement
Even small contributions grow significantly over decades, and starting late doesn’t mean giving up it just means becoming more intentional.

Final Thought

Retirement planning can feel overwhelming, but once you understand the key age milestones, everything becomes a lot more manageable. Use these ages as guideposts. Each one gives you an opportunity to adjust your strategy, minimize taxes, and build a stronger financial future no matter where you’re starting from.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

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