When you were younger, financial priorities meant paying off student debts, starting a family, buying a house, saving for the children’s college fund.
Now that you’re in your sixties with retirement not too far down the road, you’d like to reward yourself with nothing less than a comfortable life. But if you think that you can throw caution into the wind when it comes to financial planning because you’ve already worked so hard all these years, that might just backfire.
Making the right financial decisions is still a must even when you claim you have nothing else to do but to relax. Here are some important financial questions that need to be answered along with valuable tips that cannot be overlooked as you go into retirement.
When are you going to retire?
This isn’t meant to put pressure on you, but having a target date can make so many things easier for you. For one, this helps you determine how much you will need when you retire. You’ll also find out how much you will be able to get from your Social Security and other pension plans.
Moreover, this will show you the discrepancy between the amount of pension that you’ll get if you retire now as opposed to two or three years from now. That will help you decide if you’d like to work more to boost your pension income, or if the difference is not worth the additional backaches.
Where are you going to live?
Is your house fully paid, or are you still paying off a mortgage? Since your kids may have been gone by now-living on their own or with their own families-you might as well move to a smaller house. Or perhaps, consider a retiree residential community or a lower-maintenance condo unit? It’s also possible to get a reverse mortgage for your home. Knowing your options and opening yourself to these possibilities can help you decide which one is the best move for you.
How much do you need to spend?
After you retire, what kind of lifestyle do you plan to live? And to live this choice lifestyle, how much monthly income would you need? List down all the possible expenses you could think of and figure out if your retirement savings would be enough to cover it for the many years to come.
Some retirees make the mistake of blowing their entire retirement savings in a year (some even do it in only a few months!). It’s like they forget that they still have many years ahead. Make sure that your income is sufficed for the kind of lifestyle that you plan to have. If not, either save more or lower your costs.
How are your insurance, Social Security and other pension plans?
See to it that you keep current on your insurance policies, particularly life and disability coverage. This is especially important if you still have dependents like non-working spouse or children. Don’t forget to review your Social Security and other pension options. Always remember that the longer you wait before you take payments, the bigger your retirement checks will be.
Don’t live a one-day millionaire lifestyle after you retire. It’s more important to live a comfortable life for many years than to live an extravagant and luxurious lifestyle for a couple of weeks. Keep these financial strategies in mind so you won’t be thrown off track.
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