If you’ve been fortunate enough to accumulate the financial means to retire or are well on your way to an early retirement, don’t make the mistake of waiting too long to start planning. Once you hit age 50, there are some great opportunities to boost your retirement savings and optimize your cash flow and tax planning before you take the big step of leaving your job for retirement.
In this article, I’ll walk you through a timeline of age-specific milestones and strategies that you can take at different points throughout your 50s and 60s to set yourself up for success in retirement.
Roth Conversions
Before I get into the specific strategies at various ages, I want to point out that low-income years - such as the years after you stop working but before you start social security starts - can be prime opportunities for Roth Conversions. A Roth conversion is where you roll money from a pre-tax retirement account into a Roth account. The idea is to accelerate income recognition in a low-income year so you can avoid the tax hit in later years since the distributions from Roth accounts are not taxable. One very important note: If you are not yet 59.5, you need to have the cash available to pay this tax liability resulting from the conversion. If you withhold money from the rollover to cover the tax liability, you will be hit with a 10% early withdrawal penalty.
Age 50
When you hit 50, you can start to make catch-up contributions to qualified retirement accounts. This includes employer-sponsored accounts such as your 401(k)s or 403(b)s, as well as individual accounts such as Traditional and Roth IRAs. In 2026, you can put an extra $8,000 per year into a 401k on top of the standard IRS max of $24,500, bringing the total to $32,500. For individual accounts such as Traditional IRAs and Roth IRAs, you can put an additional $1,100 on top of the standard limit of $7,500. Not only does this allow you to shelter more of your income from taxes today, but that money can grow and compound tax-free until you need to draw on it in retirement.
Age 55
If you are eligible to make HSA contributions, once you hit 55, you can make catch-up contributions to your HSA of up to $1,000. This is on top of the $4,400 for individuals or $8,750 for families in 2026. This is valuable money that can reduce your taxes today, grow tax-free, and be used tax-free for qualified medical expenses. Another great advantage of an HSA is it rolls over from year to year and isn’t tied to your employer, so you can hold onto it even if you leave your job.
Another strategy that comes into play at age 55 is the “Rule of 55.” This rule allows you to withdraw money from your 401k at your most recent employer without incurring the 10% early distribution penalty, as long as you still worked for this employer until at least age 55. Under normal circumstances, you’d have to pay a 10% early withdrawal penalty for pulling money out before age 59.5. With this rule, you avoid that penalty. Be aware that you cannot utilize this rule for money rolled into an IRA or held in a 401k sponsored by a previous employer that is not your most recent.
Age 59.5
When you hit age 59.5, you can finally tap those retirement accounts without the 10% early distribution penalty. Remember, any pre-tax money will still be taxed as income upon withdrawal; you simply avoid the 10% penalty.
Age 60
Thanks to the SECURE 2.0 Act, people between the ages of 60 and 63 can make additional catch-up contributions to their 401ks. So, on top of the normal $8,000 catch-up that anyone over age 50 can contribute, those between 60 and 63 can add an additional $3,250, bringing the total catch-up to $11,250.
Another quick note about age 60: Anyone divorced or widowed can remarry and still be eligible to collect benefits based on their ex’s or late spouse’s earnings record.
If your spouse is deceased, you can also begin taking Social Security payments at age 60, although the benefit will be significantly reduced.
Age 62
Age 62 is when everyone else who qualifies for social security can file for early retirement benefits. However, the payment you are entitled to at your full retirement age will be reduced by up to 30%, depending on how early you file. On top of that, if you are still working and your income is above certain limits, your benefit may be reduced even more. While some people want to start collecting as early as possible, filing this early is rarely optimal unless you don’t expect to live into your 80’s.
Age 63
One year that is frequently overlooked from a planning perspective is age 63. This is the age that Medicare will reference to determine your premiums when you enroll for Medicare at age 65. The reason it looks back two years is that your premiums are based on your Modified AGI, which comes from your tax return. Let's say you are 64 and plan to take Medicare next year. Medicare doesn’t know what your income will be next year because you won’t be filing your return until the following year. Also, Medicare doesn’t know your income for the current year because you won’t be filing this year's return until next year. Therefore, your return from last year is all they have to look back on.
The reason it's important to start planning ahead is because the difference in premiums between the lowest and highest income levels is over $400 per month. So, this is one of those situations where an extra dollar of income can cost you thousands in annual premiums if you don’t plan ahead. Our in-house CPA recently wrote about this in an article with more specifics, which you can check out with the link below.
How $1 of Income Can Increase Medicare Premiums $2,500
Age 65
At age 65, you can finally enroll in Medicare. Unless you are still working and covered by a company healthcare plan, you should apply during the enrollment period to avoid penalties. This period starts three months before the month of your 65th birthday and ends three months after the month of your 65th birthday. There are a ton of nuances with Medicare, so I’d strongly encourage you to begin your research long before the enrollment period.
Age 66/67
Depending on your birth year, your Full Retirement Age (FRA) to claim Social Security benefits will fall somewhere between age 66 and 67. At this point, you are entitled to your full benefit. However, if you continue to wait past your full retirement age, you will get delayed credits every month, equal to 8% per year. So, if you have significant assets or expect to live well into your 80s, it may make sense to keep waiting. On top of that, your benefit will continue to grow with the cost-of-living adjustment each year.
One little nuance to note: if you are married and plan to claim spousal benefits based on your partner’s income record, it likely makes sense to file at your FRA, as spousal benefits do not get delayed credits.
Age 70
If you are claiming Social Security benefits based on your own earnings record, your delayed credits stop accruing at age 70, so if you haven’t already filed, you should at this point.
Age 73+
Finally, the last important age to be aware of is 73 if you were born between 1951 and 1959 or age 75 if you were born after 1959. This is when Required Minimum Distributions (RMDs) kick in. RMDs are mandatory distributions from pre-tax retirement accounts, even if you don’t need the money for living expenses. Optimizing your taxes before RMDs kick in is critical, as they can dramatically increase your taxable income, and there’s not as much planning you can do once this begins.
As you can see, there are many opportunities to optimize your financial plan as you approach the end of your working years. Every year you delay, you could miss valuable chances to improve your retirement readiness. So don’t wait ‘til it's too late; start planning now!
If you have any questions or want to discuss this in more detail. Feel free to contact us at info@slaytonlewis.com or to me directly at nick@slaytonlewis.com.