If you have neglected retirement planning most of your life, you may have one last chance starting at age 69 that could determine how you live your final years and if you leave anything to heirs, some financial advisers said.
Age 69 begins the last stretch before required minimum distributions (RMDs) start at age 73 and is still early enough to take steps to keep taxes low, advisers said. For example, Americans may find the road from 69 to 73 is the best time for Roth conversions, advisers said. Withdrawals from Roth accounts are tax- and penalty-free as long as your're 59-1/2 years or older and the money has been held in the account at least five years.
Taxes are one of the largest surprise expenses for retirees, according to Citizens Bank. Withdrawals from traditional IRAs and 401(k)s count as taxable income. Depending on how high that is, your Social Security could also get taxed or you could end up paying thousands of dollars more each year in Medicare premiums, making planning critical.
These years comprise "the last window to take control of your taxable income and take control of your tax future," said Sheena Gray, chief executive of the Association of African American Financial Advisers. "They could determine if your wealth is preserved or lost for generations."
