As you navigate your 60s, you have several critical retirement planning milestones to work through. While that may be intimidating, the tasks are all manageable, especially if you give yourself plenty of time to learn about your options.

You gain access to valuable benefits in your 60s, and the choices you make can affect your comfort in retirement. You also enter a phase in life where financial decisions matter more than ever.

You’re likely near the end of your working years, although you can certainly work longer if it’s rewarding (and if you’re fortunate enough to have good health). But it’s hard to go back to work and recover from financial mishaps when you’re hoping to leave the work world behind you.

At this stage, it’s important to make the transition out of full-time work as smooth as possible. Getting familiar with the retirement-related events below can help you make smart decisions and reduce the chances of mistakes.

Retirement Account Withdrawals: Age 59 ½

Once you reach age 59 ½, it becomes easier to take distributions from retirement accounts. For example, you can pull funds from traditional IRAs without early withdrawal penalties adding 10% or more to the taxes you owe on withdrawals.

You can retire before reaching 59 ½ , but you’ll want to have a plan for managing taxes. For example, pulling money from Roth accounts or spending from taxable brokerage accounts might help you bridge the gap until you can tap your pre-tax savings. Other strategies can also help you spend from your savings in tax-savvy ways, and a CPA or financial planner can help you explore ideas.

Planning tip: Make an income plan so you know how much you can draw from your savings. You want the funds to last for the rest of your life, and it’s important to include things like taxes, rising costs, and healthcare needs in your estimate.

Enroll in Medicare: 3 Months Before Age 65

Most people become eligible for Medicare at age 65, and it’s crucial to enroll in a timely fashion. If you miss a deadline, you risk paying higher costs for the rest of your life, and you may be without coverage temporarily.

The earliest you can enroll in Medicare is three months before your 65th birthday. It takes time to process your application, and mistakes can add delays, so it’s wise to get the ball rolling as soon as possible.

Planning tip: If you’re still working at age 65, you might have the option to use your employer’s health plan. But things can get complicated quickly. Speak with your health insurance provider as you approach age 65 to find out how to avoid problems.

Apply for Social Security: 4 Months Before Income Starts

You can also sign up for Social Security several months before benefits begin. Doing so can help minimize stress and ensure that you receive retirement income when you need it. The Social Security Administration allows you to apply for your retirement income benefit four months before you want payments to begin, and you might as well take advantage of that opportunity.

Most people can begin benefits as early as age 62. But claiming early results in a reduced benefit, and you’ll have to live with that reduction for the rest of your life. It’s not necessarily the wrong move, and it could make sense when you need immediate income, but waiting to claim is often an excellent strategy.

For example, if you were born in 1960 or later, claiming at age 62 leads to a 30% reduction in your Social Security retirement benefit. If that happens, for every $1,000 you could get at Full Retirement Age (FRA), you’d get just $700. On the other hand, if you wait until after your FRA, your monthly benefit can increase by roughly 8% per year until you reach age 70.

Planning tip: You don’t need to claim Social Security Benefits exactly when you retire. In some cases, it’s smart to spend from your savings or do Roth conversions for a few years before you begin taking Social Security income.

Required Minimum Distributions: Age 72

After you reach age 72, you’re generally required to take withdrawals from pre-tax retirement accounts whether you want the money or not. The IRS provides a schedule for you to follow, and you start with relatively small amounts. As a result, these required minimum distributions (RMDs) add to your taxable income, which prevents you from keeping that money sheltered from taxes indefinitely.

One of the most important things to know about RMDs is that there’s a steep penalty for failing to follow the rules. If you miss an annual RMD, there’s an excise tax that amounts to 50% of what you were supposed to withdraw.

Planning tip: Set annual reminders to be sure you never miss an RMD. The deadline in most years is December 31st, but I often do this for clients in October. That way, you stay invested for most of the year, and if anything goes wrong, you have extra time to fix things. Check with a CPA to verify that you’ll avoid problems on your tax return.

Pension Decisions: Several Years Before Retirement

If your employer offers a pension, review your options and start making decisions long before you retire. For example, you may need to decide when to start taking income and whether or not to add a beneficiary to your pension payments. Those decisions determine your monthly income and could affect your beneficiary’s quality of life.

If you work for certain government organizations, it’s essential to understand if your pension will affect your Social Security benefits. Ultimately, the goal is to understand your total retirement income to get an accurate estimate of how much you can spend each month. Knowing the details sooner rather than later reduces the chances of a letdown.

Planning tip: Customer service representatives with your employer’s pension system are often eager to help you understand your options. Call with questions and attend informational sessions to learn about your benefits.

The Big Picture

The topics above focus on your finances, but the most important thing is that you continue to live an excellent life after you stop working. Money doesn’t buy happiness, but it can be a tool to eliminate problems and buy experiences.

You may be living on a fixed income in retirement, but that doesn’t mean you should feel limited. In fact, Margaret Manning shares numerous insights from the Sixty and Me community that can help make retirement fulfilling on any budget.

If you want to learn more, check out this video:

Let’s Have a Conversation:

What milestones (financial or otherwise) are you most looking forward to in your 60s and beyond? Do you feel prepared for all of this, or are there any areas that seem a little intimidating?