Whether you’ve already retired or are just preparing for your “life after Intel,” you should be aware of the choices you have to make at certain ages. The following is a list of key decision points that can affect your benefits from Intel and the Social Security Administration. Be aware that individual situations could vary and consult official policy resources before finalizing your plans
Age 59.5 – Withdrawing Funds from a Pre-Tax Retirement Account
- If you’re 59½ or older, you’re allowed to withdraw from your 401(k) or Retirement Contribution account without penalty. Applicable taxes will apply. You should consult a tax advisor. Any funds withdrawn before age 59.5 are subject to a 10-percent federal tax penalty for early withdrawal
- An exemption to the 10-percent federal tax penalty occurs for Distributions made to you after you separated from service with your employer if the separation occurred in or after the year you reached age 55
Age 62 – Consider Timing for Monthly Social Security Benefits
Your age affects the amount you receive as Social Security benefits. You can find full information at the SSA website
- If you start at the earliest eligibility age, the amount of your benefits is reduced for each year prior to full retirement age. If you start at age 62, you will receive 75 percent of the full monthly benefit amount. Your subsequent benefit does not increase above this level except to add cost-of-living increases. You receive no age-based increases
- Retirees receiving Social Security before full retirement age can earn up to a set limit of earned income from wages or self-employment without a temporary reduction in Social Security benefits. Exceeding the limit triggers a one-dollar reduction in the benefit amount for every two dollars that you earn beyond the cap. Investment returns, pensions, capital gains, and inheritances are not considered wages. Receiving Social Security Benefits While Working
- If you have other income in addition to Social Security, you might have to pay federal taxes on your Social Security benefits
Age 65 minus Three Months– Enroll in Medicare
- You qualify for automatic enrollment if you’re collecting Social Security benefits. You should receive your Medicare card about 3-months before your 65th birthday. If you’re not collecting Social Security by the time you age into Medicare at 65, you’ll need to actively enroll yourself. There are penalties for missing the 7-month enrollment period which starts 3-months before your birthday, includes the month of your birthday & expires 3-months after your birthday (unless your birthday is on the 1st of the month when your 7-month period starts 4-months before you turn 65 and ends 2-months after the month you turn 65)
Age 65 – Minimum Pension Distribution
- Since Intel’s pension plan is a minimum benefit plan; your pension benefit is compared to the balance in your Retirement Contribution (RC) account. If your monthly pension benefit is greater than that of your RC plan, you will receive an additional pension benefit. If it is less, you’ll receive only the balance in your RC account
- For those retirees eligible for the Intel Minimum Pension Plan, you must choose the form of your distribution before reaching age 65 or your benefit will be paid as an annuity automatically. Here is the explanation of payment options from Fidelity:
- “If you retired from Intel prior to age 65 and the present value of your vested Minimum Pension Plan benefit is more than $5,000, it will be automatically paid as an annuity at age 65, unless you elect another form of distribution, such as lump sum. You may request your Minimum Pension Plan benefit to commence prior to age 65, but the amount of your benefit will be reduced. If you do not elect a form of distribution before your 65th birthday, your Minimum Pension benefit will be paid in a single life annuity or, if you are married, as a 100% joint and survivor annuity with your spouse. If you are married and elect a form of distribution other than a joint and survivor annuity under the Minimum Pension Plan, a notarized spousal consent form is required before your distribution(s) can be processed”
- Contact the Fidelity Investments Benefit Center for more information at 1-888-401-7377
Age 66-70 – Full and Maximum Monthly Social Security Benefits
- You must reach full retirement age to receive Social Security benefits without reduction. For those born before December 31, 1954, the full retirement age is 66. For people born after 1954, full retirement age ranges between ages 66 and 67. The amount of your benefit increases each year that you delay the start of receiving benefits up to age 70 when you reach the maximum, which is 132 percent of the full benefit amount. After reaching full retirement age, you can earn any amount of income from wages or self-employment without impacting your Social Security benefits
Age 73 – Required Minimum Distribution Requirement
- Each year, starting the year you turn age 73, you must withdraw the required minimum annual distribution percentage from retirement accounts — that is, IRA, SEP-IRA, SIMPLE IRA, or retirement plan account. If you don’t take the RMD each year within the required time frame, the IRS can impose a 50-percent federal excise tax penalty on the amount that you should have withdrawn. IRS has a page with FAQs on RMDs for various types of retirement plans with required distributions.