59 1/2 is much more important than turning 60

[orbops]

For me as an early retiree when I had turned 50, the 59 1/2 milestone has been my biggest target milestone. Turning 60 this year seems like a non-event compared to hitting the 59 1/2 milestone next month. I feel like this is when all of my retirement planning really kicks in. I had mentioned the 59 1/2 milestone to my high school friends when we all turned 59, but didn't get any responses back. I guess since all of them are still working, it doesn't matter to them.

Was this a major milestone for you?

 

[TheWizard]

Not so much.
I worked until I was 62, then 63, so it was mostly a non issue...

 

[rk911]

No, it was not. I'm unclear why 59 1/2 is such a big deal. I d
recall turning 30 was mentally difficult (I was at work and my crew did a nice, unexpected thing for me) but otherwise none of my other birthdays have been significant in any way...positive or negative. OP I don't understand why 59 1/2 was traumatic for you.

 

[RetiredHappy]

Mine was at 60 when my deferred annuity started its payout phase. Then it was 62 when I started my SS. My next important milestone is 65 when I go on Medicare. After that it is downhill all the way.

 

[TheWizard]

Mine was at 60 when my deferred annuity started its payout phase. Then it was 62 when I started my SS. My next important milestone is 65 when I go on Medicare. After that it is downhill all the way.

I fixed the smiley for you...

 

[Dtail]

Started using some 401k distributions for living at age 57, so not really for me.
65 became a larger one now due to these large increases in health insurance.

 

[ArmchairMillionaire]

I'm really looking forward to turning 59-1/2.

Then I can kick John Hancock and all their B.S. fees to the curb and roll everything into Vanguard.

 

[imjustawarrior]

59.5 doesn't matter to me. We are living off of our taxable account, but I can see why 59.5 would be important to some. I think 59.5 would only be important to me if I screwed up something with my IRA or Roth and accidently took money out. The 59.5 would avoid the penalty.

I'm 58. For some reason I think I will be old when I turn 60. My 91 year old dad would probably say 60 is still young.

 

[Dtail]

59.5 doesn't matter to me. We are living off of our taxable account, but I can see why 59.5 would be important to some. I think 59.5 would only be important to me if I screwed up something with my IRA or Roth and accidently took money out. The 59.5 would avoid the penalty.

I'm 58. For some reason I think I will be old when I turn 60. My 91 year old dad would probably say 60 is still young.

So would some of us 65 year olds.

 

[RunningBum]

I was never relying on tax deferred so 59.5 was a non event to me but I get that many people have had to scramble for cash to last them until they can access tax deferred at 59.5. 65 with Medicare is my milestone.

Not sure why you brought up 60. I've never heard that as a milestone age with respect to ER. If you are talking health-wise, that's apples and oranges to financial age milestones. Besides, I think age is just a number and you are as young (or old) as you feel.

 

[GenXguy]

59.5 is a non-event for me. I am not going to be pulling retirement funds until I'm 65 unless something happens with ACA, plus I could have pulled them penalty free once I became retired - I was already over 55 and one was a 457B. 59.5 is irrelevant even in that case for me. 60 is a non-event as well. 65 will be an event, although probably not until 4 months later.

 

[COcheesehead]

No, we had a substantial amount in a taxable account that was very helpful in early retirement.

 

[Fermion]

We started a 72t at age 53 so 59.5 would just mean the ability to end it. It also means the ability to tap Roths which is a bigger deal although I have significant contributions I could pull out before then with no tax or penalty.

62 is a big one for SS. I am thinking of grabbing it and stopping the 72t or the equivalent of that amount. This is because I worry about SS changes and would like to already be getting benefits.

65 is huge for getting off of ACA and being able to do Roth conversions. Right now a Roth conversion of $40,000 would cost us about $35,000. At 65 it will just be 12% federal tax or 22% or whatever.

 

[Golden Mean]

For me as an early retiree when I had turned 50, the 59 1/2 milestone has been my biggest target milestone. Turning 60 this year seems like a non-event compared to hitting the 59 1/2 milestone next month. I feel like this is when all of my retirement planning really kicks in. I had mentioned the 59 1/2 milestone to my high school friends when we all turned 59, but didn't get any responses back. I guess since all of them are still working, it doesn't matter to them.

Was this a major milestone for you?

I'm 55, so the past tense doesn't apply to me, but yes, 59.5 is when I can start pulling from my IRA(s) and my Roth is unencumbered. Will be nice to have more options than my taxable to live off of.

Definitely feel like I'm in the "bridge" years right now.

 

[CyclingInvestor]

59.5 was my biggest retirement goal. Having retired at 48 with 95% of my assets in IRAs, I felt constrained by the strict 72t withdrawal schedule and was happy to leave it behind and pull out what I wanted.

 

[orbops]

No, it was not. I'm unclear why 59 1/2 is such a big deal. I d
recall turning 30 was mentally difficult (I was at work and my crew did a nice, unexpected thing for me) but otherwise none of my other birthdays have been significant in any way...positive or negative. OP I don't understand why 59 1/2 was traumatic for you.

Not traumatic, just eagerly awaiting 59 1/2 so that I can start reducing my Rollover IRA and then Roth conversions become less of an issue. Yearly spending limits become more relaxed, and I can now control my tax bracket by leveraging my Roth account as necessary.

 

[RetiredHappy]

When we retired we set aside 7 figure just to tide us through about 7 years before the various income streams would be sufficient to fund our expenses. 59.5 wasn't meaningful to us.

 

[CalBird]

Just curious how the number 59.5 was chosen instead of using an integer number 59 or 60. Sounds like democrats say 59 and republicans say 60 so they have to meet midway to choose 59.5?

 

[JackJester]

Age 59.5 is huge for me as well. I can then withdrawal from my IRA penalty free. I was late to the game when it came to building up my brokerage account so that I could make it from 55 (my last day of work) to 59.5. I didn't even really know what a brokerage (taxable account) was at age 50. I learned quickly thanks to this forum, and lots of research. I cut back on my 401K contributions and instead built up the brokerage account heavily for 5 years. I will be 59.5 in Jan 2027 and I'm tracking and estimating all expenses diligently until then. And we're building a little house now that is also consuming a lot of that brokerage $. We'll make it, but maybe with just $100K to spare. I do have back up plans (e.g, a HELOC) if worst came to worst, or just pay that 10% penalty for a few months.
My recommendation for any newby working for megacorp and wanting to FIRE is to not focus 100% on maxing out your 401K. For sure you want to get that employer match for free $, but definitely open a brokerage account at Schwab or Fidelity and set up auto payments into it monthly. Get those penalty-free investments working for you early so you can make it to 59.5 if you choose to retire before then.

 

[Koolau]

I retired after age 55 so I was able to get into my 401(k) without restriction. Age 59 1/2 lost its importance but for those who retire before 55, I can see it as "all important" by comparison to, say, 60.

Now, it turns out that at age 60 is when I did my Retirement move to the Islands. That was a pretty big deal to me. Otherwise, they're all just numbers. Like last year, DW and I went to our 60th HS reunion. Talk about a number!

 

[DayDreaming]

59.5 was a non-event for me. I turned 65 recently and that's the only birthday that felt like a big one, because I went on Medicare, and that's for old people!

 

[disneysteve]

59.5 was of no significance for me. I hit it 3 months before I retired but that was purely coincidence. It didn’t factor into my decision on when to retire.

I’m now 61 and we’re doing fine. We haven’t touched retirement accounts yet except for my RMD from an inherited IRA but that isn’t by choice.

So no, 59.5 meant nothing.

 

[Aerides]

We retired at 46 so we aren't even thinking about 59.5 as we knew we'd have to have substantial taxable savings to get there, and with the bull markets of the past 10 years that hasn't changed.

We already rolled over our 401ks into fido, did that years back. I don't expect we'll touch our 401k money until well after we're able to.

ETA: But I do see plenty of threads "I have enough to retire but how can I get to it I'm 53?" - from ppl who put everything into their 401ks but little other savings. I'd hate to be in that position.

 

[Dalton]

59.5 could have been significant for me, but an inherited IRA should carry me beyond 62 (possible early SS collection), and I have more for my bridge, so we'll see how everything shakes out, but it'll be nice to have additional options.

 

[ArmchairMillionaire]

ETA: But I do see plenty of threads "I have enough to retire but how can I get to it I'm 53?" - from ppl who put everything into their 401ks but little other savings. I'd hate to be in that position.

I maxed out my 401(k) for as many years as I could from age 30 to age 54. I managed to retire at 54.5 by using the rule of 55 and ACA insurance.

Is my situation optimal? Probably not, but probably better than my former cow*rkers who are still there working, didn't put much into their 401(k)s and plan on working until 62, 65 or 67, when they can collect Social Security.