VyStar Investment Services: What’s All the Fuss About Turning 59 ½?

If you were born in the early 1960s, you’ve witnessed incredible moments throughout your life. From the Apollo lunar landings to the rise of the internet, it’s amazing to reflect on the events that have helped shape different decades. And now, there is another significant milestone approaching: nearing your 60th birthday.

Why is this age so significant? Turning 59 ½ marks a critical point in your financial journey, particularly in relation to your retirement accounts. The Internal Revenue Service (IRS) allows you to make penalty-free withdrawals from these accounts. Additionally, your employer may offer a non-taxable in-service distribution to an Individual Retirement Account (IRA)*, which presents an opportunity to reposition your retirement assets into income-generating investments, reduce portfolio risk, settle debts and prepare for your transition into retirement.

*Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59 ½, may be subject to a 10% federal income tax penalty. In-service withdrawals that are rolled to an IRA are not taxable to you at the time of the rollover.

It has also been nearly a decade since you gained the ability to make “catch-up contributions” to your retirement accounts, such as 401(k)s and IRAs. Have you taken advantage of these higher contribution amounts? In 2023, the catch-up amount for 401(k)s, 403(b)s, and 457s is $7,500, in addition to the $22,500 standard contribution limit. For IRAs and Roth IRAs, you can make a $1,000 catch-up contribution.

Hitting the age of 59 ½ also brings you closer to Social Security eligibility. While the earliest age to receive Social Security benefits is 62, resulting in a reduced rate, the full retirement age (FRA) is 67. Your benefits increase by 8% for each year you delay receiving benefits past the FRA, up to a maximum of three years. Waiting until 70 will grant you 124% of your determined benefits, and the maximum monthly benefit for 2023 has increased to $3,627. In addition to those important milestones, you’re also nearing Medicare eligibility.

As you approach this significant point in your life, it is important to make plans for your time and finances in retirement. Seeking guidance from a financial professional can help you refine your goals and timelines, oversee your investments, manage market risk and build income strategies. The right professional will be a valuable resource to you throughout your retirement.

VyStar Credit Union members can take advantage of a no-cost, no-obligation consultation with a member of VyStar Investment Services. For more information about their team and the services they provide, call them at 904-908-2495 or visit their website.

Remember, this is your time to plan, prepare and make the most of your retirement years.

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. VyStar Credit Union and VyStar Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using VyStar Investment Services and may also be employees of VyStar Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, VyStar Credit Union or VyStar Investment Services. Securities and insurance offered through LPL or its affiliates are: