Planning for the Silver Tsunami: Financial Moves to Make in Your 60s
If you’re in your 60s and starting to think about the "silver tsunami" —the aging population—and how to prepare for the future, it's a great time to make sure you're on the right track financially. While it might feel like you're starting late, there's still plenty you can do to secure a stable future.
First, it’s really important to take a look at where you stand right now. Have a close look at your savings, any investments, property, and, of course, any debts you might have. Knowing exactly where you are financially will give you a clear idea of where you need to go. You might also want to track your monthly expenses to see where you could trim back a bit, freeing up more for your savings.
If you haven’t already, now’s the time to max out your retirement accounts. If you're 50 or older, you can contribute extra, called "catch-up contributions,” to your 401(k) or IRA, which can really add up over time. For instance, with a 401(k), the catch-up amount for those over 50 is an additional $7,500. You can also consider a Roth IRA if you expect to be in a higher tax bracket in the future because it allows you to take tax-free withdrawals when you retire.
When it comes to Social Security, it’s tempting to start taking benefits as soon as you're eligible at 62, but if you're able to wait until your full retirement age or even age 70, you can increase your monthly benefits significantly. This might be something to think about, especially if you're in good health and have a family history of longevity.
At this point, you might also want to think about cutting back on expenses. If you're in a larger home that’s tough to maintain or expensive to keep up, it could be a good idea to downsize. This could free up some of your savings and put you in a more manageable situation, especially if you plan to live off your retirement savings for a few decades.
Speaking of retirement, it's crucial to plan your budget carefully. Think about how much you'll need to cover your expenses when you retire—healthcare, housing, food, travel, and everything else. You should also prepare for unexpected costs, like long-term care. Health expenses can be a huge burden, so it might be worth looking into long-term care insurance or even starting an HSA (Health Savings Account) if you don’t already have one.
Investing is something you’ll want to keep an eye on as well. You’re likely moving toward more conservative investments at this stage, but you don’t want to eliminate growth opportunities entirely. A balanced mix of stocks and bonds, and maybe even dividend-paying stocks, may help generate steady income as you get older.
It’s also worth thinking about your long-term care options. As we age, the chances of needing assistance increase, and long-term care can be incredibly expensive. Having a plan for how to cover those costs, whether through insurance or personal savings, is a big part of ensuring more financial comfort in retirement.
Many people in their 60s also explore part-time work or freelance gigs, which can ease the transition into retirement. Plus, it can be a fun way to bring in some extra cash while keeping yourself engaged.
And finally, you’ll want to make sure your estate planning is in order. This includes having an updated will, setting up powers of attorney, and considering whether a trust might be helpful to manage your assets. It’s also a good idea to review beneficiary designations on your retirement accounts and life insurance policies, just to make sure everything is up-to-date.
At this stage, consulting with a financial advisor can be a game-changer. They can help you map out a strategy tailored to your goals, especially when it comes to making the most of your assets and getting the best possible returns as you prepare for retirement.
In short, while you may be later in your career, there’s still time to take charge of your financial future. By reassessing your current situation, maximizing your savings, planning for the unexpected, and making smart investments, you can build a solid foundation for a comfortable and secure retirement.