Maximizing Your Retirement at 59.5: Key Strategies and Opportunities

Whether retirement is something you’re actively looking forward to or something that’s far ahead, you’re entering the home stretch. You’re now able to take advantage of some age-based opportunities in your retirement planning.

At age 59-½ you became eligible for some new advantages you’ll want to discuss with a financial advisor.

Some retirement options have a very limited window of opportunity, so you don’t want to miss out on getting advice and deciding whether to take advantage of them or not.

Penalty-Free Withdrawals from Retirement Accounts

At age 59-½, you can generally start taking distributions from your 401(k), workplace plan, or IRA without incurring the 10% early withdrawal penalty. This opportunity can allow you more flexibility in retirement income planning and open the door to new strategies.

In-Service Distributions from Your Workplace Retirement Plan

Some 401(k) plans allow in-service distributions starting at age 59.5, meaning you may be able to begin withdrawing funds while still employed, giving you more options for managing your investments for your future income needs. Many 401(k) plans lock you into generic investments that may not be the best fit for your goals.

Retirement Readiness Guide

Our comprehensive retirement guide is full of practical tips that can help you and your family make more informed financial decisions.

DOWNLOAD

Roth Conversions to Help Create More Tax-Free Income in Retirement

Converting all or part of your traditional IRA to a Roth IRA can be a tax-smart way to create more tax-free retirement income. While you'll pay taxes on the conversion amount, future withdrawals from the Roth IRA are generally tax-free, which can significantly decrease what you pay in taxes when you’re retired.

However, this is an advanced tax move that has a lot of fine print and details. It’s smart to get professional advice to determine when and how a Roth Conversion could make sense for you.

Important! Current tax laws are scheduled to expire at the end of 2025. You may have a limited window of opportunity to take advantage of today’s historically low tax brackets!

Secure Act 2.0 Rules Mean You Can Turbocharge Your Retirement Savings

Folks who are aged 50 and older are already allowed to make catch-up contributions to their retirement accounts. For example, in 2025, you can contribute an additional $7,500 to your 401(k) and an additional $1,000 to your IRA.

In 2025, individuals between 60 and 63 years old can make a special catch-up contribution of either $10,000 or 150% of the standard catch-up limit for that year (whichever is greater.)

These extra contribution opportunities may allow you to boost your retirement savings as you approach the finish line.

You Don’t Have to Navigate Opportunities and Risks Alone

At Johnson Financial Group, our team is here to help assess your current financial situation and readiness for retirement, identify any risks or red flags, and create a proactive strategy to help you create the retirement lifestyle you want.

Retirement planning is not just about accumulating wealth. It’s about managing risks, such as market fluctuations, unexpected expenses, and inflation, and helping you create strategies to mitigate them.

Even if you’re years away from retirement, it’s a good time to get an objective review of your current portfolio and financial situation.

Connect with one of our Johnson Financial Group advisors today.

Want to gauge your own retirement readiness?

Click below to download a comprehensive guide that breaks down some of the most critical concerns as you prepare for retirement.