3 Retirement Tips for People in Their 60s

Man in his 60s on computer

Please note the publish date of this blog. Financial information, market conditions, and other data mentioned in this post may no longer be accurate or relevant.

When you’re in your 60s, retirement takes on a whole new meaning. 

For decades, you’ve been planning your life for this distant reality, but now that future is closer than ever.

According to a 2021 survey by Naxitis Investment Managers, the average age people expect to retire is 62 (coincidentally, the same year you become eligible for Social Security benefits). But optimism about retirement predictions is far from sunny.

The same survey found that 40% of investors agreed with the statement “it will take a miracle” to retire securely.

Like raising a child, creating a robust retirement plan that supports your ideal lifestyle may take a village — and Abacus can help you build yours

As you near your golden years, there are several financial and personal items to review on your retirement to-do list. Let’s explore some fundamental retirement planning reminders for people in their 60s.

1. Clarify Your Retirement Vision

Your retirement lifestyle is the cherry on top of your retirement plan. You can be as financially prepared as possible, but if you don’t know how you want to live your life, you won’t be able to authentically enjoy it. 

It’s time to add some clarity to your retirement lifestyle goals. With retirement so close, you’ll want to bring these goals out of the abstract and into clear focus.

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Where do you want to live?

Selecting a place (or two) to live in retirement is one of the most critical lifestyle choices you’ll make. Where you live influences your activities, community, expenses, and more. 

If you want to stay in your home, think about how well the house will age with you. Are there any practical renovations like widening the hallways, first-floor primary bedroom, or zero-clearance showers that may make aging in your house more practical?

Things tend to get more complicated if you plan on moving. Ask yourself:

  • Are you confident about the new location (whether it’s just around the block, a few states away, or even out of the country)? When you’re evaluating a potential new place, think through the financials like cost of living, tax changes, insurance needs, and healthcare. It’s also important to think about how the location will impact you personally. Is it close to family, friends, and loved ones? How will you make a new community? Are there activities and opportunities to engage in that you’re passionate about?
  • Are you financially prepared for a move? Expenses include minor fixes around your current house, potential renovations at the new place, closing costs, realtor commissions, movers, and many more. Keep in mind that the average cost of selling a home is roughly 10% of the sales price — meaning it can get expensive quickly. 
  • What are your plans for retirement living arrangements? Is renting or buying more your speed? Do you need or want less space to maintain?

Think carefully and critically about where you want to live in retirement. And remember, retirement isn’t a vacation; it’s your life. It’s best to choose a place that meets your long-term financial and personal needs. 

How will you spend your time?

Once you’re confident about the place you’ll call home, think about what you want your life to look like. 

Planning your time in retirement is one of the most misunderstood and underestimated areas of retirement planning. Sure, the first few months of waking up without an alarm, leisure days with no plans, and freedom from your inbox may have a honeymoon glow, but that feeling will likely fade.

Building a routine in retirement is a beneficial way to infuse structure, meaning, and purpose into this next phase of life. 

Creating a fulfilling and purposeful routine in your golden years is an exciting challenge. Here are a few ideas to consider: 

  • Regularly volunteer

Volunteer work brings immense value to many people throughout their lives. In retirement, you have more time to dedicate to the causes and organizations you care about. 

  • Nurture your relationships (and don’t be afraid to form new ones)

Social connections are critical for a happy retirement. Be sure to stay close with your family and friends. If you move, you’ll likely have to work harder to form a new community. Start with your interests such as hobbies, exercise classes, and charitable organizations to see what connections you make. 

  • Pursue a passion project or hobby

Now that you’re not on the 40 hour a week grind, you can dedicate your time to interests outside of the office. 

  • Set and work toward goals

Having a concrete goal like writing a book, learning to paint, taking a course, or traveling the world adds structure to your life that can help you continue to grow. 

  • Learn

Learning something new every day keeps your mind sharp. Commit to learning new things throughout your golden years by reading, taking classes, and stepping outside your comfort zone.

  • Work part-time

Just because you’re retired doesn’t mean you have to stop working. Part-time jobs, starting your own business, or freelance work might be rewarding and help you avoid feeling sedentary. 

  • Make travel plans

Travel is often high on the list for many new and seasoned retirees. Take some time to make travel plans that excite you. 

The closer you get to retirement, the more you want to hone your golden year vision. Doing so can help make the transition that much smoother.

2. Start Playing With Actual Numbers 

When you plan for retirement, so much is hypothetical.

But as you near the transition, it’s essential to make your plan as realistic as possible, and numbers are a significant part of that equation. 

Make a Retirement Budget (And Test It)

Do you know how much you can spend in retirement? If not, now’s a great time to crunch the numbers and build a loose budget. 

Start by evaluating your projected income sources.

  • Fixed: pension, Social Security, annuity, cash, etc.
  • Variable: retirement accounts, personal investments, real estate, etc.

Next, calculate your estimated expenses.

  • Living costs (rent/mortgage, utilities, cell phone, internet/cable, etc.)
  • Insurance (homeowner/renter, auto, life, healthcare, etc.)
  • Debts (mortgage, car, credit cards, etc.)
  • Entertainment/Extras (travel, gym memberships, clubs, shopping, etc.)
  • Taxes

Do the numbers add up? Many retirement planning experts estimate you should aim to replace roughly 80% of your pre-retirement income to maintain your current lifestyle. That number will fluctuate depending on your unique financial and personal circumstances. 

No matter your retirement number, you want confidence that it can support your lifestyle. That’s why some people find it helpful to “test drive” their retirement budget for a few months before they actually retire. Doing so could illuminate areas where you thought you’d spend more (or less) and how living on a certain amount of money feels for you. 

Testing this idea before you retire gives you room to adjust as needed.

How Social Security Factors Into Your Income Plan

Optimizing your Social Security benefits is a surefire way to boost your retirement income. Generally speaking, you can enroll in Social Security at three points:

  • Early, once you turn 62
  • At your full retirement age (FRA), which is 67 for those born in 1960 or later
  • Delay benefits until 70

Each option has benefits and drawbacks; most significantly, benefits are reduced if you collect before your FRA, while benefits increase after your FRA. 

Collecting at 62 results in roughly a 30% permanent reduction to your primary insurance amount (PIA) or full benefits. That said, you accrue delayed retirement credits for every month you wait to collect after your FRA up until age 70, which could create around a 24% bump in your monthly benefits.

Several factors work together to help you decide when to enroll in benefits, such as your other income sources, spouse and dependent income needs, your current health (and family health history), your retirement goals, and more. Abacus can help you create a Social Security plan that optimizes your benefits.

3. Consider Your Investment Strategy

Until now, your investment strategy may have remained relatively consistent. Typically, when preparing for retirement, your asset allocation is designed for growth. But now that you’re on the cusp of retirement, you may want to make some strategic adjustments. 

You and your advisor can review the following questions:

  • How will your risk tolerance and capacity change, and what effect will they have on your allocations?

You may not be as willing to take on the type of risk you did early on in your career. Why? Your time horizon is much shorter, as you need access to the funds quicker. Your risk capacity looks at how much risk you need to take to reach your goals. Being so close to retirement, it’s likely those risk levels can shift. Be honest with yourself and your advisor about your comfort level with risk now. Knowing these elements will help you adjust your allocations accordingly. For example, you may modify the type of securities you hold (equities, fixed income, etc.) to reflect this new transition. 

  • How can you intentionally stay invested throughout retirement?

Retirement doesn’t mean your investing days are over. Remember, you may have several decades to enjoy your golden years and your money should continue to grow with you. Staying invested in retirement is an excellent way to help you reach your golden goals like consistent travel, home upgrades, setting up a fund for your grandchild’s education, or leaving your children a healthy inheritance.

  • Do you have an investment withdrawal strategy?

A retirement withdrawal strategy helps you determine how much you plan to withdraw from each type of retirement account. A clear approach maximizes your investments and minimizes taxes over the long run. Your advisor can help you create a plan to withdraw from your taxable (brokerage), tax-deferred (401(k), traditional IRA), and tax-exempt accounts (Roth IRA, Roth 401(k)), as well as how much to withdraw each year and which order is most favorable. 

The investment strategy that got you to retirement probably won’t be the same one that gets you through retirement. Work with your advisor to modify your investment plan to support your retirement initiatives.

Plan With Purpose

Retirement planning in your 60s turns vision into reality, which can often lead to a mixed bag of emotions. 

It’s both scary and exciting to see your retirement plan finally come to fruition. Just know that no matter where you’re at in the process, the team at Abacus will help you expand what’s possible. 

Are you ready to bring purpose to your retirement plan? Connect with an Abacus advisor today. 


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