Starting May 28th, through September 3rd, the Next Generation office will close at 3:30pm ET on Fridays.

Age is More than Just a Number

Published on March 21, 2017

When it comes to planning for retirement, everyone should be aware of certain milestones because everyone starts and stops at different times in their lives. Your retirement age could differ from your friends, coworkers, or relatives, but what matters most is knowing the four milestone ages that are important to the growth of your retirement plans. Keeping these ages in mind can help you optimize your self-directed retirement accounts- so be sure to make note of them!

1st Milestone: When You Start Saving for Retirement

Congratulations! You have started your retirement journey! The age you start this journey could be any age. The moment you begin thinking about your future and saving for retirement is a milestone. You could be putting away as little or as much as you’d like. The act of saving for your future can help you reach your retirement goals. If you haven’t started yet, the best time to start is always right now!

2nd Milestone: Fifty Years Old – Begin to Catch Up

Once you hit fifty, you can begin catch up contributions to your IRAs. The limit for annual contributions to all of your IRA accounts is $5,500 if you are under the age of fifty. Once you hit fifty, your contribution limit increases to $6,500 annually. Being able to put more money into your retirement accounts means you can increase the potential growth until you decide to begin taking of your distributions. Speaking of distributions…

3rd Milestone: Fifty Nine and a Half Years Old – No Penalty for Early Withdrawals

Once you turn fifty nine and a half, there is no longer a penalty for early withdrawals from your IRA. This does not mean you must begin taking distributions if you do not want to, but you can if you desire. Just make sure to remember that when you withdraw from certain accounts, like a Traditional IRA, you will need to pay income tax on the money received. If you are distributing cash from an account that has already been taxed, like a Roth IRA, you will not be taxed upon distribution since the money was taxed prior to entering the account.

4th Milestone: Seventy and a Half Year Old – RMDs Begin

Seventy and a half is when Required Minimum Distributions (RMDs) begin. It is crucial to keep this in mind, because if you do not take your RMD, you can be penalized up to 50% of the amount you were going to take. This is not the case if you have a Roth IRA. If you have a Roth IRA, distributions are not required at any age.  If you need to take an RMD from your Next Generation account, please feel free to contact us at 888.857.8058 so we can calculate the amount you would need to take.

Self-directed retirement plans are administered by third-party professionals, like Next Generation Trust Services, that review and execute the transactions, hold the assets, and manage all the paperwork associated with the plan.

Next Generation Trust Services makes it easy to get started on the path to a more eclectic, and potentially more lucrative, retirement portfolio. In addition to the information available in our white paper on the topic and on our website, our Starter Kits walk you through the steps needed to open and fund a new self-directed retirement plan. Once you’ve carefully researched your investment, send us the instructions to execute your transaction and you’re on your way to being better prepared for your retirement needs.

If you have questions about the various nontraditional investments these plans allow, contact our helpful professionals for answers at Info@NextGenerationTrust.com or 888.857.8058.