Financial birthdays to be aware of - age milestones for Social Security benefits and retirement plan withdrawals - Brief Article

USA Today (Society for the Advancement of Education), Dec, 1997

The older that people get, the less they like to think about--let alone celebrate--birthdays. However, there are several important financial birthdays older Americans shouldn't overlook, suggests the Institute of Certified Financial Planners, Denver, Colo.

Age 50. The earliest a spouse can collect a survivor's retirement benefits from Social Security--but only if he or she is disabled.

Age 59 1/2. You can begin making withdrawals from any retirement plan or IRA without the 10% early withdrawal penalty (assessed against any money you pull out and don't roll over into another retirement account or IRA). The withdrawn money faces income taxes.

Age 60. The earliest a spouse can collect survivor's benefits from Social Security (unless disabled). They will be reduced to 71.5% of the full benefits the deceased would have been entitled to at the full retirement age (65-67), though. If you remarry before age 60, you permanently lose survivor benefits. If you do so at age 60 or later, you can collect as long as you are not claiming benefits as a current spouse.

Age 62. The earliest you can begin collecting your own Social Security benefits or your share (50%) of the amount being received or eligible to be received by a living or former spouse. These benefits will be reduced permanently by up to 20% from what you or your spouse would be entitled to at full retirement. It is also the minimum age you can get an FHA reverse mortgage, wherein you receive money from a lender in exchange for a share of some or all of the equity in your home. Most commercial lenders require the 62 minimum age as well.

Age 65. Turn 65 before the year 2000 and you can receive full Social Security benefits. You can begin receiving Medicare on the first day of the month in which you turn 65.

Age 65-67. When you can begin to collect full Social Security gradually is being shifted from 65 to 67, starting in the year 2000 and being completed by the year 2027.

Age 70. Earnings above certain limits no longer reduce your Social Security benefits. For 1997, for example, every $3 of income earned over $13,500 by Social Security recipients ages 65 through 69 reduces their benefits by $1.

Age 70 1/2 By April 1 of the year following the year you turn 70 1/2 you must start making required minimum withdrawals from your retirement plan or IRA. If you continue working beyond age 70 1/2, you don't have to make minimum withdrawals from a qualified retirement plan until you actually retire. However, you must begin withdrawals from any IRAs by 701/2 or if you own five percent or more of the company.