Whether you’ve been on top of your finances from the beginning or you’re just now getting around to a full financial checkup, your 60s are an important time to carefully consider your financial health. Are you financially prepared for retirement? Have you created a list of potential expenses now that you’re nearing your retirement years? As you approach your 60s, make sure to add these items to your financial checklist.
Keep Paying Into Your Retirement Accounts
Ideally, you want to keep funding your retirement accounts until you are ready to retire. Qualified retirement accounts may be tax-deferred, which means that you’ll pay taxes on withdrawals. Does your employer offer matching contributions? If you don’t take full advantage of the match, you’re turning away free money. In your 50s, you’re also eligible for catch-up contributions, which can help increase your available funds in retirement.
Evaluate Your Retirement Asset Mix
Take a look at how you’ve positioned your retirement accounts. Do you have a good mix of pre- and post-tax accounts? Roth IRAs have no required annual minimum withdrawals after 70 ½ and can give you more flexibility in retirement. Depending on your current tax bracket and income level, you may want to adjust how you make your contributions, or convert some old IRA’s. As retirement nears, you should revisit your current investment allocation. While bonds generally see less growth than stocks over the long-run, they offer some stability as you start to rely more, or even entirely, on your savings.
Title Your Accounts
If something happens to you, what happens to your money? Adding a beneficiary can clear up any potential confusion. With this strategy, you can make it easier to pass your funds to heirs in the event of your death. Keep in mind, that beneficiary designations will override your will. Review them about once per year or after any major life changes like marriage, divorce, or the birth of a grandchild to make sure your money is going where you want it to.
Solidify Your Retirement Plans
What does life in retirement look like to you? Are you going to be downsizing into a smaller home or will you finally be able to move into the dream home that you’ve been thinking about for years? Will you be staying in your current city or moving to a new one, perhaps to get away from the cold or to be closer to your family?
You should also consider how you’ll be spending your money and your time: are you going to be traveling frequently? Do you have hobbies that you’d like to invest more in once you’re retired? Consider how those hobbies have the potential to impact your spending and make sure that you have adequate funds in your retirement account to handle those plans. A passive source of income through your retirement years, from rental property or royalties, for example, may make it easier to fund your plans.
Prepare for Healthcare Costs
Healthcare remains one of the biggest expenses in retirement and many seniors find themselves struggling to cover the cost of healthcare, especially if a major and ongoing health problem pops up unexpectedly. Even with Medicare, you need to be ready for these potential expenses, but it’s especially true if you’re retiring early before you’re eligible for Medicare. Make sure that your retirement planning includes a strategy for dealing with medical costs, whether that means making sure that you have secondary insurance or monitoring your retirement accounts to be sure that you’ve secured enough of a buffer to deal with unexpected medical expenses.
Do you need help with financial planning as you get closer to your retirement years? Are you struggling to decide how to invest your financial assets? Contact Sharkey, Howes & Javer today to speak with a CERTIFIED FINANCIAL PLANNER™. We’ll help you get your financial planning on track and provide you with the advice you need to meet your financial goals.