Age 72
“Because Social Security is a guaranteed monthly payment that is adjusted for inflation, it can be extremely important for recipients who live into their 90s. The longer you wait to take Social Security, the larger your benefit, which can be advantageous for those with longer life spans,” says Georgia Bruggeman, founder and CEO of Meridian Financial Advisors LLC in Holliston, Massachusetts.
After age 72, you have to make certain annual withdrawals from 401(k)s and traditional IRAs, under the rules of the Required Minimum Distribution (RMDs) in the Secure Act. If you fail to take your minimum distribution, you will most likely be required to pay 50% penalty of the amount that should have been taken out. To prevent this from happening, you must take your first distribution by April 1 of the year after you turn 72 after which you need to make your annual withdrawals by Dec. 31 of each year.
There are several exceptions to this rule, however. For 2020, for instance, the minimum distribution requirement has been temporarily suspended. This means retirees don’t have to take traditional retirement account distributions until 2021.
