Year-end Retirement Planning Deadlines Not to be Overlooked

We’re closing in on the end of the year, and with that comes a multitude of retirement related deadlines to keep in mind. Here’s a round-up of the most pertinent for those still working and those that are retired.

401(k) contribution deadline

401(k) contributions, which can be worth as much as $18,000 in 2015, are typically due by the end of the calendar year. Employees age 50 and older can additionally make catch-up contributions worth an extra $6,000, which are also due by Dec. 31.

IRA contribution deadline

You have until April 15, 2016, to contribute up to $5,500 to an IRA that can be applied to tax year 2015. Workers age 50 and older are eligible to contribute an additional $1,000, for a total contribution of $6,500 in 2015.

Required minimum distribution deadline

Required minimum distributions from traditional retirement accounts (except for the first distribution) are due by Dec. 31 each year. The penalty for missing a required withdrawal is a stiff 50 percent of the amount that should have been distributed.

First required minimum distribution deadline

You have until April 1 of the year after you turn 70 1/2 to take your first required minimum distribution from your retirement accounts. However, all subsequent distributions are due by Dec. 31. Delaying your first required distribution could necessitate two required withdrawals in the same year, which could result in an abnormally large tax bill.

Medicare open enrollment

Medicare beneficiaries can make changes to their prescription drug coverage between Oct. 15 and Dec. 7 each year. During this open enrollment period, you need to make sure that the medications you use will continue to be covered with affordable out-of-pocket costs and switch plans if they won't.