A good credit score affects many aspects of our life, from where we can afford to buy a house to the job we hold. But did you ever think about how your credit score could affect your retirement? Even if you plan ahead, you may still find yourself in a position where you need to take out a loan or refinance after you’ve left the workforce. This is why maintaining your good credit as you prepare for retirement is so important. Here are some major milestones, by age, to consider as you prepare to retire.


At 50, most people begin to seriously think about preparing for retirement. Your qualified retirement accounts now allow you to “catch up,” or make larger than normal contributions to boost your retirement savings. For IRAs and Roth IRAs, you can increase your contributions by $1,000 per year. For 401(k)s, you can increase your contribution by up to %5,500 per year.

59 ½

At this age, you’re able to withdraw a portion of money from your IRA without the standard 10% withdrawal penalty. It’s important to note this should only be done to cover emergencies, like medical expenses or unexpected lost wages. You’ll still have to pay taxes on the money you withdraw. Roth IRAs work a bit differently since they use after-tax dollars; you will need to have had the Roth IRA for a minimum of five years to withdraw tax-free.


At 62, you can now apply to receive your Social Security benefits. However, note that if you apply now you will only receive 70% of the full benefit amount. If you’re still working, your benefits may be taxed or even withheld. Unless you urgently need the money, it’s best to wait until you’re 66 or 67 to begin drawing your Social Security benefits.


At 65, you need to apply for Medicare even if you’re not ready to retire and even if you’ll still be covered by an employer’s insurance plan. If you fail to apply, your future Medicare premiums will be 50% higher (eek!).


If you were born between 1942 and 1954, the age is 66. If you were born after 1954. the age is 67. It’s the age you’re eligible to receive full Social Security benefits even if you’re still working. You’ll still need to allow for taxes, however, because your “earnings” from Social Security are taxable.


Up until this point, if you haven’t filed for Social Security benefits, you’ve received a Delayed Retirement Credit of 8% per year. This credit runs out when you turn 70, so if you haven’t started drawing on your benefits now is the time to do it.

70 ½

This is a crucial milestone; if you don’t begin to withdraw benefits by the time you’re 70 ½, you will have to pay a 50% tax penalty on the amount that should have been withdrawn. Crazy, right? But the government wants to make sure they get their cut of the taxes on the benefits you have saved up until this point.

By keeping track of these important milestones and keeping a clean credit report along the way, you’ll be prepared to reap the full benefit of your Social Security earnings and be able to secure a low-interest loan should the need arise.