RALEIGH, N.C. — There are many important dates, like anniversaries and holidays, we need to circle on our calendars in the new year, but how can some of those milestones impact our finances?

Alex Sutherland, a financial professional with LifePlan Group, shares some dates we should all highlight to stay financially fit in 2022.  

Birthdays

Pay close attention to your birthday if you’re hitting one of the following milestones:

  • Age 59 ½: This is the standard age at which you can withdraw money from your retirement accounts, like a 401(k) and IRA, without paying a penalty to the IRS, even if you’re still working
  • Age 62: You become eligible to receive Social Security, but you might want to wait to start claiming your benefit as it will continue to grow each year you wait to file until age 70
  • Age 72: Required minimum distributions are mandatory withdrawals from qualified retirement accounts like 401ks, 403bs and traditional IRAs. The RMD kicks in at age 72 or 70 ½ depending on your age as of January 1, 2020. (Age 70 ½ if you were 70 ½ before January 1, 2020, or 72 if you turned 70 ½ after January 1, 2020)

If you’re interested in learning how to calculate how much you need to withdraw, the IRS has worksheets available. Financial advisers are helpful to consult prior to withdrawing Social Security.

November 1

  • Open enrollment periods for health insurance typically start around November 1.  Make sure you research your options through your employer
  • If you have access to a high deductible health plan, you may have access to a Health Savings Account (HSA)
  • If you have an HSA, you can contribute money pre-tax to the account and your investments will grow tax-free. Your withdrawals are then tax-free as long as you use them for qualified medical expenses
  • You can also withdraw your money for any reason after age 65 without penalty. You will have to pay taxes for uses other than non-medical expenses

Major Spending Events

  • Annual holidays and other major life events may also need to be considered in your personal financial plan
  • Mark big-spending days like Black Friday or vacations on your calendar. These are times you will likely spend more than your usual monthly expenses
  • Sutherland says to prepare for big life events, try setting aside an extra $100 each month if you can. He says you’ll have $1,200 saved and won't break the bank during these major spending events
  • Have a retirement plan in place
  • Be intentional with your savings to help meet long term financial goals
  • If you use a financial professional, meet two to four times a year to make sure your retirement plan is on track

Financial tips & information courtesy LifePlan Group