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Unforgettable Birthdays

Birthdays may seem less important as you grow older. They may not offer the impact of watershed moments, such as getting a driver’s license at 16 and voting at 18. But beginning at age 59, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits.

59½ — You can start taking penalty-free withdrawals from IRAs and qualified retirement plans, provided certain conditions are met. Ordinary income taxes generally apply to these distributions. (Withdrawals taken prior to age 59½ are subject to a 10% federal income tax penalty.)

62 — You are eligible to start collecting Social Security benefits, although your benefit will be reduced by up to 30%. To receive full benefits, you must wait until “full retirement age,” which ranges from 65 to 67, depending on the year you were born.

65 — You are eligible to enroll in Medicare. Medicare Part A Hospital Insurance benefits are automatic for those eligible for Social Security. Part B Medical Insurance benefits are voluntary and have a monthly premium. To obtain coverage at the earliest possible date, you should generally enroll about two to three months before turning 65.¹

70½ — You must start taking minimum distributions from most tax-deferred retirement plans or face a 50% penalty on the amount that should have been withdrawn. Annual required minimum distributions are calculated according to life expectancies determined by the federal government.

1) Medicare & You 2010, U.S. Department of Health and Human Services

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.

Steve H. Nelson, is a Registered Representative of and offers securities through FSC SECURITIES CORPORATION, Member FINRA/SIPC. *Advisor Services offered through AeGIS Financial Group, Inc. not affiliated with FSC Securities or registered as a broker dealer. They are not obligations of, or guaranteed by, FSC SECURITIES CORPORATION or any other affilitated entity. Such investments will fluctuate in value and are subject to investment risks, including loss of principal. A broker/dealer, investment advisor, BD agent or IA representative may only trasact business in a particular state, or only if they are excluded or exempted from the states's broker/dealer, investment advisor, BD agent or IA rep requirements, as the case may be: and follow up, individualized responses to comsumers in a particular state by broker/dealer, investment advisor, BD agent, or IA rep that involve either the effecting or attempting to effect transactions in securities or the rendering of persoanl investment advice for compenstaion , as the case may be, shall not be made without first complying with the state's broker/dealer, investment advisor, BD agent or IA rep requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status of disciplinary history of a broker/dealer, investment advisor, BD agent or IA rep, a consumer should contact his or her state securities law administrator. Steve H. Nelson is registered in the following states: Arkansas, Arizona, California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Indiana, Michigan, Maine, Nebraska, New Mexico, Nevada, Ohio, Oregon, Texas, Utah, Washington.