Navigating your 60s can be a pivotal time for your financial health. As you approach retirement, making strategic money moves can set you up for a secure and fulfilling future.
This decade is often marked by significant life changes, such as leaving the workforce, managing health care needs, and planning your legacy.
Understanding how to manage your finances effectively during this period can help ensure that your retirement years are stress-free and enjoyable. Here are 14 smart money moves to consider to boost your retirement readiness .
Retire Sooner: Take this quiz to see if you can retire early
1. Adjust your retirement portfolio
As you approach retirement, it's crucial to reassess your investment strategy . Consider shifting from high-risk, high-reward investments to more stable options to preserve your capital.
Consider a balanced mix of stocks, bonds, and other fixed-income securities that align with your risk tolerance and retirement timeline.
Do you owe the IRS over $10K? Ask this company to help you eliminate your late tax debt.
2. Decide when to start receiving Social Security benefits
You can start receiving Social Security benefits as early as age 62, but your monthly benefits will be reduced. If you wait until your full retirement age (FRA) of 67, you'll receive your full benefit amount.
However, delaying benefits until age 70 can increase your monthly payments even further by 8% each year you wait. Understanding how these timing decisions impact your financial situation is key to maximizing your benefits.
3. Set a target retirement age for yourself
Determine a realistic retirement age based on your financial readiness, health, and lifestyle goals.
Consider how long you want to work and how much you need to save to maintain your desired standard of living. Setting a clear target can help you plan more effectively and stay on track.
Make Money: 8 things to do if you're barely scraping by financially 4. Reduce and pay off debt
Entering retirement with minimal debt can enhance your financial security. Prioritize crushing your high-interest debt , such as credit card balances and personal loans. This reduces your financial obligations and frees up more of your income for savings and essential expenses.
5. Pay off debt faster
If you're carrying substantial debt, consider accelerating your repayment plan. Increase your monthly payments or make extra payments whenever possible. Focus on paying off higher-interest debts faster and then moving on to the next debt.
Reducing your debt load faster can save you money on interest and help you enter retirement with a clean slate.
6. Boost your emergency fund
Ensure you have a robust emergency fund to cover unexpected expenses, such as medical bills or home repairs. Aim to save at least three months' worth of living expenses, more if possible.
A well-funded emergency account provides peace of mind and financial stability during unforeseen events.
Find Out: 8 must-do things before 60 for a stress-free retirement 7. Evaluate your retirement budget
Take a close look at your expected retirement income and expenses. Create a detailed budget that outlines your sources of income, such as Social Security, pensions, and savings withdrawals.
Compare this to your anticipated expenses, including housing, health care, and leisure activities, to ensure you can maintain your desired lifestyle.
8. Think about whether you'll downsize your home
Consider whether downsizing your home makes financial and practical sense.
Moving to a smaller, more manageable property can reduce your housing costs, such as mortgage payments, property taxes, and maintenance expenses. It can also free up equity that can be used to bolster your retirement savings.
9. Take on a side hustle
Starting a side hustle can provide additional income during retirement. Look for opportunities that align with your skills and interests, such as consulting, freelancing, or turning a hobby into a small business.
A side hustle can supplement your retirement income and keep you engaged and active.
Are you a senior? Avoid these 6 sneaky money mistakes 10. Plan for your elderly parent's care
If you have elderly parents, planning for their care can prevent unexpected financial burdens. Explore options such as long-term care insurance, in-home care services, and assisted living facilities.
Having a plan in place helps your parents receive the care they need without compromising your financial stability.
11. Plan for your own long-term care costs
Similarly to your parents' needs, consider purchasing long-term care insurance for yourself to help cover the costs of in-home care, assisted living, or nursing home care.
Long-term care can be a significant expense in retirement. Planning for these expenses can protect your savings and provide access to quality care when needed.
12. Practice a healthy lifestyle
Maintaining a healthy lifestyle can reduce your health care costs and improve your quality of life in retirement.
Focus on regular exercise, a balanced diet, and preventive care. Staying healthy can help you avoid costly medical treatments and enjoy a more active and fulfilling retirement.
Earn Points and Miles: Find the best travel credit card for nearly free travel 13. Max out your retirement contributions
Continue contributing to your retirement accounts, such as a 401(k) or IRA, to maximize your savings. Take advantage of available catch-up contributions allowed for individuals aged 50 and older.
These extra contributions could boost your retirement nest egg and provide additional financial security.
14. Keep your estate plan up to date
Ensure your estate plan reflects your financial situation and current wishes. Review and update your will, power of attorney, health care directives, and beneficiary designations.
Keeping your estate plan current helps protect your assets and ensures that your loved ones are taken care of according to your intentions.
Bottom line
From adjusting your investment strategy to planning for long-term care costs, these smart money moves can help you achieve peace of mind and financial stability.
Have you considered all the financial aspects of your retirement plan ? Now is the perfect time to review and adjust your strategies so you can smoothly transition into this exciting new chapter.
More from FinanceBuzz:
Get Out of Debt for Good: Try these 6 clever ways to crush your debt.
Most Popular
Comments / 0