News and Commentary

Age is More than A Number When Planning for Retirement By Sean Deviney, CFP®*

After years of diligent saving, you probably built a significant nest egg to afford a comfortable retirement, but that doesn’t mean you’re ready to put your feet up and coast through your golden years. Preparing for retirement requires having a plan in place to address your spending habits, rising health care costs, changing tax laws and a myriad of unexpected changes that can throw your plans into disarray. The age at which you retire will also have a significant impact on your future finances. Following are three critical factors to consider when timing your retirement right.

Social Security Benefits

You may begin claiming Social Security benefits as early as age 62 but doing so may reduce the amount of the actual payout you receive.

According to the Social Security Administration, claiming benefits at this early age will be approximately 29. 2 percent less than the amount you could receive if you wait until you reach full retirement age, which in 2021 is 67 for people born after 1959. By contrast, for each year you delay benefits up until age 70, the amount you actually receive will increase 8 percent per year.

Another factor to consider when it comes to Social Security benefits are taxes. For the most part, the benefits you receive will be subject to federal and state income taxes, depending on how much income you have from other sources and your tax-filing status. Moreover, while you can continue working while receiving Social Security benefits, you may receive reduced benefits when your earnings exceed annual limits.

The decision of when to begin receiving Social Security should be made under the guidance of professional advisors to ensure it reflects your unique circumstances, needs and goals.


When you reach age 65, you qualify for Medicare, the government-backed health insurance program that can help you cover the rising costs of medical care, including stays in hospitals and skilled nursing facilities (Part A), doctor visits, durable medical equipment, outpatient and home health care (Part B), and prescription drugs (Part D). For most people who worked or have a spouse who worked and paid into Medicare taxes, there is no monthly premium for Part A coverage.

When nearing age 65, it is important to recognize all the requirements you need to follow to enroll in Medicare and avoid any gap in coverage or potential penalties. For example, you can sign up for Medicare Parts A and B three months before reaching age 65 or during the seven-month initial enrollment period (IEP) that ends three months after the month you turn 65. If you delay enrollment beyond that age because you have health coverage from an employer, the last day you can sign up for Medicare coverage is eight months after your employment ends, even if your eligibility for Medicare benefits occurs on or before you sign up for COBRA health coverage. If you become entitled for Medicare after signing up for COBRA, your individual COBRA benefits will automatically cease but may be extended for an additional three years for your dependents.

Required Minimum Distributions from Retirement Accounts

Under current law, you must begin taking annual withdrawals from certain retirement accounts when you reach age 72. These required minimum distributions (RMDs) from 401(k) plans, traditional IRAs, SEP IRAs and SIMPLE IRAs are calculated based on your age and your account balance at the end of the previous year. Because RMDs are treated as taxable income, they can push you into a higher tax bracket and expose you to higher-than-expected federal income tax liabilities as well as state and local taxes. Advanced planning is the best way to help you minimize the impact of RMDs on your finances in retirement. For example, you may delay RMDs from a 401(k) plan when you continue to work for the employer sponsoring the plan. Another option when you do not need to rely on RMDs from your IRA to cover living expenses is to transfer up to $100,000 to a charitable organization.

About the Author: Sean Deviney is a CFP®* professional, a retirement plan advisor and a director with Provenance Wealth Advisors (PWA), an independent financial services firm affiliated with Berkowitz Pollack Brant Advisors + CPAs. For more information, call (954) 712-8888 or email

Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

Sean Deviney is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC. Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of PWA and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional. The information contained in this report has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Investments mentioned may not be suitable for all investors. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion. Please note, changes in tax laws may occur at any time and could have a substantial impact on each person’s situation. While we are familiar with the tax provisions presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

* Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Posted December 8, 2021

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