Financial Milestones FINANCIAL NEWS YOU CAN USE.FINANCIAL MILESTONESA LOOK AT KEY AGES IN YOUR FINANCIAL LIFE.Birth – First day to obtain a Social Security number. Relatives can use it to set up investment accounts for you.Age 19– “Kiddie tax” (tax at your parents’ rate) disappears. Income and capital gains distributions now are taxed at your tax rate, which typically is lower than your parents’ rate.Age 18 or 21– Age of majority (differs by state). Money set aside for you in UTMA/UGMA accounts for minors is now legally yours.Age 25 and 30 – Auto insurance premiums typically decrease, assuming you have a good driving record.Age 26-Dependent status ends. Even if you are a full time student, you cannot be carried as a dependent on your parents’ tax return.Age 50 – A welcome letter from the American Association for Retired Persons (AARP) usually arrives. You may be eligible for senior discounts in restaurants, at department stores, and on travel services.Age 55 – You may be able to access funds from a 401(k) plan if you leave your employer and the plan includes an early retirement provision. This may also be a good time to consider IRA rollovers.Age 59 1/2 – You are past the 10 percent penalty tax on withdrawals from traditional IRAs, annuities, and qualified retirement plans. You may want to leave this money untouched to continue its tax-deferred growth.Age 62 – Earliest age to receive Social Security retirement benefits, but amounts are reduced. Also, you may lose some of your benefits if you continue working and earn income over a certain amount.Age 65 – Traditionally the normal retirement age for full Social Security benefits, however, an increase to age 67 for full benefits is being phased in. Good news: You may work as much as you want without losing any benefits once you reach your full retirement age (age 65 for persons born before 1938; gradually increases to age 67 for those born in 1960 or after).Age 70 – Deferring receipt of Social Security retirement benefits until this age generates the maximum annual benefits.Weigh this option against the opportunity to invest the money if you begin receiving benefits at an early age.Age 70 1/2 – Required Minimum Distributions from traditional IRAs and employer-sponsored retirement plans must begin.Age 90 – The default distribution option on an annuity contract may automatically activate at this age, so contact the company ahead of time to select a distribution option to best fit your needs.Age 100 – Most cash value life insurance policies endow, meaning benefits are paid as if you had died. If you don’t need the money for long-term care expenses, perhaps it’s time to set up college accounts for great-grandchildren. Other Important DatesOctober 1– Earliest date to submit free application for federal student aid form (FAFSA)April 1– An IRA owner who fails to take a distribution in the year they reach 701/2 can avoid a penalty by taking that distribution no later than April 1 of the following year. However, that means the IRA owner must take two distributions in the following year - one for the year in which they reach age 701/2 and one for the current year.April 15– Tax returns are due (generally)October 15– Last day to file a tax extensionDecember 31– Last day to establish certain employer-sponsored retirement plansArticle provided courtesy of Lincoln Benefit Life.