Most adults plan for retirement in their 60s. Now that you’re here, it’s important to review your finances and evaluate whether or not you’re ready to take that big next step. For those that are, it’s key to ensure the transition is as smooth as possible. After all, you want to enjoy the fruits of your labor. So while it’s certainly the perfect time to tick off some of those bucket list goals, you’ll also want to remember these seven financial tips for your 60s so you can enjoy that bucket list to the fullest.
1. Calculate Your Retirement Policies
Now is the time to re-evaluate your retirement investments. You may have federal pension funds, employer pension funds, registered retirement savings plans, or tax-free savings accounts. Consult an advisor to understand how to best allocate and withdraw from your different retirement income sources so they continue to pay dividends for years to come.
2. Prepare For Extra Expenses
Inflation rates and unexpected events can have a significant impact on your retirement savings. So first, consider how these influences will affect your investments when you retire. Then plan your retirement goals and activities accordingly so your future finances can keep you comfortable.
Extra expenses can also arise in the form of family responsibilities. But, many people who retire comfortably also enjoy assisting family members and loved ones in need.
3. Consider Casual Employment
If your circumstances do not allow you to give up employment altogether, don’t fret. Besides the financial benefits of continuing to earn a steady income, you may likely feel fulfilled by working, whether that’s in the same job you’ve had for years or something new. Identify the type of part-time work that fits your economic needs, skill set, and interests to get the most out of employment.
4. Break Down Retirement Phases
There are often three stages to retirement. At the beginning of your retirement, spending tends to be higher as you travel and do the things you couldn’t do while working. As you slow down a bit, the importance of quality time with loved ones increases, and you begin to establish routines. It’s also important to discuss costs related to health care and estate planning so you can rest easy in your final phase of retirement knowing you and your loved ones are secure.
5. Double Check Your Portfolio
At this stage, you should reallocate your portfolio’s asset classes. The waiting period for stocks will be longer in the event of a prolonged downturn. Adjusting your cash and stock mix could keep your retirement plans on track.
6. Keep An Eye On Your Savings
Withdrawing too soon or too much from your retirement savings can harm your long-term retirement plans. For example, a recent survey shows that the average person over 50 years of age saves $20,000 per year. But most people withdraw their retirement savings at a rate four times higher than recommended.
Remember the 4% rule. Withdraw 4% of your retirement savings each year (adjust for inflation after the second year) to prevent your retirement funds from running out before 30 years.
7. Think Carefully Before Downsizing Your Home
With home prices rising significantly over the past decade, downsizing may seem like a good idea. It is important to note, however, that the sale of a home can incur several costs, including land transfer taxes, capital gains taxes, and legal fees. As a result, timing and planning are crucial if you want to sell your home at this stage.
These tips will ensure you can embark on your well-earned retirement without stress. If you plan your finances wisely, you can enjoy your retirement to the fullest.