Congratulations! At your 60th birthday, you've actually entered your seventh decade of living. We hope that you have given some thought to your retirement by now and made significant plans toward meeting your retirement goals. If so, age 60 is a good milestone to trigger a review of your retirement plans. (If not, start planning immediately, because you are rapidly running out of time.)
Now is the perfect time to think about your post-career life and take some meaningful actions. Here are six steps at 60 that can guide you toward a happy retirement.
1. Review/Create Your Retirement Plans – What does retirement mean to you? Whether it's relaxation, travel, a second career, or some other pursuit, outline what you plan to do in retirement now that the end of your career is in sight. You need to firm up your plans in order to perform the next steps
2. Map Your Social Security Strategy – Are you planning to wait until your full retirement age (FRA), retire early, or continue working beyond your FRA? Has your strategy changed as retirement gets closer? Keep in mind that your monthly benefits will be reduced if you retire before your FRA, and you can gain up to an extra 8% per year until age 70 by delaying your retirement — but ultimately, your decision on when to retire should be based on a work-life balance.
3. Run Some Numbers – Calculate how long your savings will last under different scenarios of income and expenses during retirement using the MoneyTips Retirement Planner. Doing best- and worst-case scenarios can give you an idea of whether you need to increase income or decrease expenses to maintain your retirement comfort level.
April-Lewis Parks, the Director of Education and Public Relations with Consolidated Credit, suggests using online tools to assist your efforts. "There's all kinds of apps and calculators that will let you see ... how much more money will I save over time.... Once people are aware of how little changes have a huge impact, then they will start to make those changes."
4. Adjust Financially – Based on your scenarios, adjust your income and expenses to meet your goals. Adam Carroll, the Chief Financial Officer at National Financial Educators, uses the sporting analogy of playing "great offense and great defense" — with offense referring to ways you can increase your income and defense referring to cutting expenses to the greatest extent possible. It's hard to win any game, sporting or financial, by focusing on just one aspect and ignoring the other.
Don't forget to review your investment portfolios and make sure they are meeting your criteria of risk vs. returns. Even if you have a target fund designed to adjust automatically over time, it's wise to review its performance over the past few years.
5. Start Networking for Retirement – It's easy to get isolated in your work environment and forget to maintain friendships outside of your career. Start networking to make more connections related to whatever pastime you plan to engage in after retirement. A solid but diverse network of friends will keep you grounded and ready to make the transition into retirement.
6. Assess Your Health – Have you been taking care of yourself with proper diet and exercise? If not, today is an excellent day to start. You want to be in suitable health to enjoy your chosen retirement activities, as well as to avoid prohibitive medical costs. Fidelity estimated that 65-year-old couples retiring in 2016 would require an estimated $260,000 to cover lifetime medical costs, with another $130,000 if long-term care insurance is included.
Medicare does not cover all health care expenses now, and it still won't when you reach your FRA. Assess your insurance needs and long-term care plans for you and your spouse, and make sure the proper costs are built into your retirement scenarios above.
Once you reach age 60, retirement is a short distance away. Why not use today to review your retirement planning, especially if today is your 60th birthday? After blowing out 60 candles on a birthday cake, retirement planning should be a snap.
Let the free MoneyTips Retirement Planner help you calculate when you can retire without jeopardizing your lifestyle.