Advantages Making the most of your retirement plan

FINANCIAL MILESTONE BIRTHDAYS 50: You can make catch-up contributions to an employer-sponsored retirement plan, if allowed by the plan, or individual retirement account (IRA).1 55: If you leave your employer, you can make penalty-free withdrawals from your employer-sponsored retirement plan.2 59½: You may take penalty-free distributions from your employer-sponsored retirement account or traditional IRA.2 If you've held a Roth IRA for at least five years, you may take distributions from it tax-free.3 62: You can begin to collect early Social Security retirement benefits. However, by not waiting until your full retirement age (see 65-67, below), your benefits will be permanently reduced. 65: You're eligible for Medicare. Apply three months before your 65th birthday by visiting your local Social Security office, calling 1-800-772-1213 or visiting www.socialsecurity.gov. 65-67: You can begin collecting full Social Security benefits. Full retirement age rises in stages from age 65 for those born in 1937 or before to age 67 for those born in 1960 or later. To find your full retirement age, visit www.socialsecurity.gov. 70: You stop earning delayed retirement credits for not taking Social Security retirement benefits, so there is no advantage to delaying benefits beyond age 70. 70½: You must begin required minimum distributions (RMDs) from most employer-sponsored retirement plans and traditional IRAs, and usually cannot make further contributions.4 1  For 2010, the catch-up contribution amount for IRAs is $1,000; $5,500 for most employer-sponsored plans. 2  Withdrawals are taxed at ordinary income tax rates; premature withdrawals may be subject to a 10% tax penalty. (Does not apply to 457 plans.) 3  Premature withdrawals from a Roth IRA are subject to income tax and a 10% tax penalty. 4  If RMDs are not taken, a tax penalty of 50% of the amount that should have been withdrawn but wasn't may be assessed. Some employer-sponsored plans do not have RMDs at age 70½ if you continue to work.

Advantages, published by Wells Fargo Institutional Retirement and Trust, provides general information on savings, investments and retirement planning. It is not intended to provide advice regarding the investment needs of specific individuals. Wells Fargo Institutional Retirement and Trust is a division of Wells Fargo Bank. Images may be from one or more of these sources: ©Thinkstock, ©iStock, ©Fotolia. ©2010 Wells Fargo Bank P65772 0310

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