As you approach retirement – whether you plan to stop working at age 67, 70 or stay employed part-time for as long as possible – your sixties are a critical time. You need to think about your desired retirement lifestyle, how much income you’re going to need and what your expenses are going to look like.
You’ve probably already considered whether you’ve saved enough and whether you’ve put that money in the right investments, but what about your mortgage? Do you still have one? Are you maximizing your current savings? Do you have a savings plan well into retirement?
Here are six financial goals for your sixties that can help you achieve the retirement you’ve envisioned.
1. Minimize your debt
Hopefully you’re not carrying credit card debt from month-to-month at this point, but things happen, bills need to be paid, and it’s better than pulling money out of your retirement savings. That said, if you do have credit card debt, it’s a good idea to focus on paying that down right away. The interest can really eat away at your ability to save.
You can start this process by thoroughly looking over your budget for any expenditures you can forgo, even for just a little while. If you have more than one credit card, consider a debt payoff plan like the debt snowball method, which allows you to pay more toward one credit card each month, while making minimum payments on the others, until that card is paid off. You can then continue that pattern until each card is paid in full.
Of course, not everyone’s budget allows enough wiggle room to pay more toward a particular debt. If that’s your case, and your credit scores allow, you can consider applying for a balance-transfer credit card that would let you pay off your debt interest free. Just don’t forget about the balance transfer fee that card might charge while you’re looking at whether that’s a feasible option.
If you own a home and are still making mortgage payments, now’s the time to figure out just how much extra you can put toward your mortgage to finally pay it off. You don’t want that monthly financial obligation on a fixed income. The equivalent of one extra payment each year can reduce your principal balance significantly. Contact your mortgage lender to find out what you need to consider when making extra payments or an early payoff.
2. Maximize your retirement savings
If you didn’t start making "catch-up" contributions to your retirement accounts at age 50, it’s a good idea to consider doing so now. For 2017, you can make an extra $6,000 in contributions to your qualified retirement plans such as a 401(k), 403(b) and most 457 plans. Plus, you can contribute an additional $1,000 to your IRA.
3. Continue to save
While maximizing your 401(k) and IRA accounts is important, it’s not always enough for some people. Depending on your retirement goals, you may want to start saving more than the amounts allowed in these accounts. Now’s the time to consider adding things like tax refunds, bonuses and any other lump-sum payments directly to your savings. And, of course, you’ll want to maintain an emergency fund for unforeseen financial needs.
4. Develop an income plan
As you get closer to retirement, it’s wise to develop a concrete income plan ahead of time that lets you create a realistic retirement budget. To do this, it’s good to consider:
- Your essential and discretionary expenses
- All sources of income, including Social Security, pensions, investments and retirement savings
- How often to take withdrawals and from which accounts
- Whether you’ll need a guaranteed income annuity or similar vehicle
5. Simplify everything
You want to enjoy your retirement and focus on the things you’re interested in, not be worry about your money, your home and making ends meet.
Consider consolidating your investments so there are fewer accounts to keep track of. You could, for example, roll your retirement savings into a single IRA. You could do the same with other liquid assets you have. You could even cash out or take a lump sum distribution if you’re 59 ½ or older. Your financial planner or plan manager should be able to help you determine what options are best for your needs.
If you’ve lived in the same home for several years and it’s large, you may want to consider down-sizing. Home maintenance – think roof replacements, HVAC replacements and the like – can be a big hit to your budget. Selling your home and buying a condo or something similar can not only free up cash to invest, it means less cleaning, maintenance and repairs as your ability to deal with these things lessens.
If keeping your home is important to you, consider options like sharing your home with family or close friends during your retirement years. You’ll share the expenses and upkeep, plus you’ll have a built-in social network. You can also consider hiring people like house cleaners and a yard crew to help you maintain your home if your budget permits.
6. Protect yourself & your loved ones
If you don’t already have things like life insurance and long-term care insurance policies in place, it’s a good time to consider them. Now is also a good time to review your homeowners insurance to make sure your coverage is adequate.