59.5 Brings Half Birthdays Back into Style!

59.5 Brings Half Birthdays Back into Style! Bulman Wealth

Turning sixty is an energizing experience. It not only carries with it more knowledge and anticipation for a new time of life, but it also presents vital money choices that can influence your life in retirement. On the off chance that you are arriving at 59.5 this year, you will be qualified to pull from your retirement funds without penalty. This gives you a chance to reorganize your funds and live an alternate life. Here are components to think about in this critical year of your life.

Your 401(k) and IRA Takes on New Meaning

When you come to retirement age, your 401(k) and IRA may be essential sources of income. You are not obligated to draw from these accounts if you are still gainfully employed and earning. You can select to move your 401(k) into an IRA. Generally, 401(k)s provide restricted investment choices that amount to about 8 to 12 portfolio choices [1]. These accounts require administrative fees that are a certain percentage of your assets, ranging from 0.2% – 5%. Although these fees are needed to keep the account running and to help it grow, some people may not prefer them [2]. Transferring a portion or all of your 401(k) into an IRA may streamline your finances and can potentially lower costs and give you a wider choice of investments [3]. Taking advantage of this can let you manage your investment risk and customize your accounts and tactics to your specific retirement objectives. On the other hand, you could make your 401(k) into an emergency cushion. Withdrawing money from either a 401(k) or a traditional IRA would come with tax effects, and it is essential to consult a financial professional before engaging with a retirement account income strategy.

Increase Your Retirement Funds with Catch-up Contributions

Beginning at the age of 50, you are allowed to make additional deposits to both your 401(k) and IRA with the goal of increasing your savings as you get close to retiring. The contribution limit for IRAs has been upped by $1,000 for 2022 and will be $7,500 in 2023 [4]. With the annual 401(k) limit being $22,500 in 2023, the catch-up amount for 401(k)s is $7,500, allowing you to contribute a total of $30,000 to your 401(k) annually. When it comes to Roth IRAs, there are specific income levels that limit contributions. Single filers who earn over $153,000 are subject to these limits [5]. This also applies to married couples who file jointly and earn over $228,000 [6]. Catch-up contributions assist in giving you more money to retire with and can be a good opportunity to capitalize on.

Turning 59.5 brings up important questions and decisions to make. It’s best to speak to a financial professional to know how best to tailor your 401(k) and IRA withdrawals and claims to your retirement goals. Speak to us today to gain better clarity.


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Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an SEC Registered Investment Advisor. Insurance products and services are offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922. Being registered as an investment advisor does not imply a certain level of skill or training.

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