Your age determines what actions you may take in your retirement plan. For instance, your age affects when you may:
- join a plan,
- make catch-up contributions,
- take money from your plan without paying additional taxes, and
- be required to take money from your plan.
An employer-sponsored retirement plan cannot exclude an employee from participating after the employee turns age 21 (and completes the necessary service requirement).
Note: SIMPLE IRA plans have no minimum age requirement.
In the year of turning 50 or older, annual catch-up contributions may be made to:
A public safety employee who receives a distribution from a governmental defined benefit plan after separation from service is not subject to the 10% additional tax on early distributions if the distribution occurs in the year of turning 50 or older.
An employee who receives a distribution from a qualified plan after separation from service is not subject to the 10% additional tax on early distributions if the distribution occurs in the year of turning 55 or older.
Distributions from qualified retirement plans, including IRAs, are not subject to the 10% additional tax on early distributions once the recipient turns 59½.
A pension plan may pay benefits to a participant age 62 or older even if the participant has not separated from employment. The rules regarding a plan’s youngest permissible normal retirement age have a safe harbor of age 62.
Defined benefit plans often calculate retirement benefits based on annuities beginning at age 65.
Unless a participant elects otherwise, benefits under a qualified plan must begin within 60 days after the close of the latest plan year in which the participant:
Required minimum distributions must generally start by April 1 following the year of turning 70½, for plan participants and IRA owners who reach age 70 ½ prior to January 1, 2020.
The SECURE Act made major changes to the RMD rules. For plan participants and IRA owners who reach the age of 70 ½ in 2019, the prior rule applies and the first RMD must start by April 1, 2020. For plan participants and IRA owners who reach age 70 ½ in 2020, the first RMD must start by April 1 of the year after the plan participant or IRA owner reaches 72.