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What to Do When You Turn 72

Cypress Wealth Services

October 2022

Turning 72 is not usually one of the big life milestones we think about. But when it comes to financial planning, reaching this specific age is significant for a few reasons.

It’s at the age of 72 that you must make sure you have a plan for future long-term care needs, have your estate planning documents in order, and—most importantly—begin taking required minimum distributions from your retirement accounts.

Plan for Future Long-Term Care Needs

If you don’t already have long-term care insurance, now is the time to address your future long-term care needs. Someone reaching age 65 this year has almost a 70% chance of requiring long-term care, and since you’re already past that milestone, your odds are even higher.

In 2020 alone, an estimated $475.1 billion was spent on long-term services and support. Dementia is increasingly common among the elderly. An Alzheimer’s Association report estimates the lifetime cost of care for someone with Alzheimer’s to be just under $360,000 (in 2019 dollars), double the lifetime costs for people without the disease. The cost of nursing home care depends on a variety of factors (location, duration of stay, and care services required, among others), but Genworth’s 2021 Cost of Care Survey estimates a private room in a nursing home costs $297 per day or $9,034 per month; semi-private rooms are slightly more affordable, with a median cost of $260 per day, or $7,908 per month.

Long-term care is a future expense that needs to be addressed and planned for. There are several ways to plan for long-term care expenses. You can purchase a stand-alone long-term care policy, add a long-term care rider to a life insurance policy, or self-insure with savings. If you don’t have a plan yet, you should meet with a financial advisor to discuss your options and determine which makes the most sense in your particular situation.

Organize Your Estate Planning Documents

Gather all estate planning documents in one place and make sure you aren’t missing any! It is important to have an updated will, advanced medical directive, and financial power of attorney.

On average, a woman turning 72 today will live another 15.9 years. While that is a long time, that doesn’t mean you will be in a position to manage your financial life or communicate your medical desires. After all, more than 6 million Americans are living with Alzheimer’s. By 2050, this number is projected to rise to nearly 13 million.

It is important to get everything set up now so that your wishes are known and can be fulfilled if you get dementia or become otherwise incapacitated. An advanced medical directive tells medical providers what kind of life-sustaining measures you wish to be taken, and a power of attorney will give a trusted person the right to manage your affairs if you cannot. Finally, everyone will eventually pass away, so a will or trust is necessary if you want any say over the disposition of your wealth and possessions. It is best to get all of this in place now while you are still healthy.

Begin Taking Required Minimum Distributions

When you turn 72, one of the most important things to do is start taking required minimum distributions (RMDs) from your retirement accounts. While you can plan for your long-term care needs and get your estate planning done at any time, RMDs have a strict deadline.

You must begin taking RMDs the year that you turn 72, and you must take them every year after that for as long as you live. The first year they are required, you can actually put off taking it until April 1 of the following year, but after that, they must be taken by December 31 each year. That means that if you put off taking your first year’s RMD until the next year, you’ll end up taking two RMDs that year.

RMDs are required from 401(k)s, 403(b)s, IRAs, and just about every retirement account except a Roth IRA. They are calculated with an IRS formula that basically takes your account balance at the end of the previous year and divides it by your current life expectancy.

It’s critical to begin taking your RMDs on time and to calculate them properly because you will otherwise face a 50% fine. That means that if your RMD is $4,000 and you don’t take it, you will owe the IRS a $2,000 penalty on top of any income taxes due on the full $4,000.

We’re Here to Help

Have you recently turned 72, or will be soon? Make sure to begin taking your RMDs or make a plan to do so. Now is a great time to consult with a financial advisor who understands the laws and can help you develop an RMD plan that can reduce taxes and protects you from penalties. If you’d like some assistance with your RMDs, long-term care planning, or any other financial topic, our Cypress Wealth Services team is here to help. Call us at 866.888.6563 or contact one of our offices today.


About Cypress Wealth Services

Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high-net-worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services serves a broad range of client needs using their experience and expertise to act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring the wealth and legacy a person has already built to their loved ones. With financial advisors in Palm Desert, CA, Tustin, CA, Athens, GA, and Anchorage, AK, the firm serves clients across the country with Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit or call 760.834.7250.



This material was created to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax, or other professional advice. The services of an appropriate professional should be sought regarding your individual situation.