Search This Blog

Thursday, May 06, 2010

Happy Birthday on a Budget

Its someone’s birthday today.  No, not mine.  But someone I think the world of.  Someone for whom all of the below “gifts” apply.  Seriously, at a certain point in your life you start getting birthday gifts from your Uncle Sam.  How great is that?
Happy 65th --- at age 65 you automatically qualify for Medicare.  All you have to do is fill our the forms – and you can do that ahead of your birthday, so you really do get the birthday gift on your birthday (thoughtful, that Uncle Sam)
Happy 62nd --- You can start collecting Social Security if you need or want to.  But if you’re like this fellow, don’t do it.  It makes your payments much lower than they would be if you waited until 65 or 67 to start collecting.  All the same, good to know you can collect if you need or want to.
Happy 60th  This is the point in time where you can make withdrawals from your IRA and other personally funded retirement accounts.  Again, don’t do it if you don’t have to.  But good to know you can --- freeing, sort of.
Happy 50th  Wow – just as all of the kids are independent and your income is as high as its ever going to be (okay, that was a depressing moment there, wasn’t it?) Uncle Sam increases the limits for your contributions to your retirement accounts.  Use the next 15 year to sock away $6,000 a year in your IRA and $22,000 in your 401k.  Even with the short investment span and the historically tragic interest rates right now, that could add up to a lot of spare change.  What a great birthday present!
(And yes, you who’s birthday we’re celebrating around here, I DID get you a real present – the presents from Uncle Sam are just bonuses)