15 Smart Ways to Prepare for your 60’s
As you get closer to retirement age, it can be very easy to feel anxious or worried about your future. If you are going to retire, will you have enough money to survive? If your health is failing or you do not take proper care of yourself, you may worry about healthcare costs or even how you will enjoy your golden years easily. In order to enter this time of your life that you should be enjoying rather than worrying, there are a few simple steps that you should take.
1. Have a Plan
The first step that anyone should take before entering their 60s is to have a plan. Do you want to stay in your current home or downsize to something more affordable and easier to navigate? Do you plan to travel? What types of healthcare issues do you currently have that may throw a wrench in things? These are all considerations you need to make in order to properly prepare. When you know your plans, you can set the appropriate money aside on a monthly basis or make the necessary accommodations to make your plans a reality.
2. What Will You Do With Your Equity?
If you do in fact decide to downsize, you need to have a plan for the equity you will receive when you sell your home. Chances are you will have money left over from your current home and the purchase of a new home. Having a plan for that money is crucial to avoid blowing through it just because it is there. If you are into investments, make sure to diversify the money into several accounts or consider investing in housing in order to see a faster return on your investment. Whatever you decide is right for you, make sure to have a plan ahead of time to avoid spur of the moment decisions.
3. Pay Off Debts
If you have numerous debts, now is the time to eliminate them or at least pay them down. You do not want to enter your 60s with debts that you cannot afford without working full-time. You should be able to enter your retirement years and do as you please. Make a plan now to get mortgages, car payments, personal loans, and credit card debts paid off. If you are vigilant about it now, you will be able to forget about them in your 60s and just enjoy life.
4. Determine Your Health Insurance Needs
As you enter your 60s and begin to think about retirement or actually retire, you have to consider your health insurance needs. Chances are your employer used to provide these benefits for you, but once you are on your own, you need to find other alternatives. Will Medicare be enough for you or should you consider supplemental insurance to meet all of your healthcare needs? You need to know these answers in order to not only find the right insurance, but to plan your finances accordingly as individual insurance premiums can be rather costly.
5. Determine How Your Spending Will Change
Will your spending habits change as you age? Hopefully, you will not still be paying your mortgage, so that will provide you with significant savings. You can also save money on gas if you do not have to commute to work anymore. But what lifestyle changes do you plan on making that will add to your expenses? Will you have a second home, travel, or pick up a new hobby? All of these things will require money which you are not used to spending right now, so factor those things in so that you can save and plan financially for the future.
6. Diversify Investments
If you have your retirement money in investments, you need to know how to diversify it. Having all of your eggs in one basket, so to speak, can leave you in financial ruin should something go bad. Instead, put your money in liquid and non-liquid accounts across varying industries. This enables you to protect yourself should one or more accounts not perform as well as you had originally anticipated. If you have liquid and non-liquid accounts, you will also have immediate access to money should you need it, while saving the other money for later in life, when it is needed even more.
7. Appoint a Medical Power of Attorney
No one wants to think about being incapacitated or dying for that matter, but they need to consider who will make decisions for them regarding their health. While you are still of sound mind, it is a good idea to appoint that person. Before you make any decisions, you should talk to the person you choose to see if they are up for the task of carrying out your final wishes. Not everyone will be comfortable in this type of situation, which you are better off knowing sooner rather than later.
8. Determine Your Life Insurance Needs
As you head into your 60s, chances are you will not need life insurance, but some may. If you have a mortgage, need to pay for a college education for children, or weddings to pay for in the future, life insurance might come in handy. On the other hand, if you are pretty financially secure with no mortgage or other large liabilities, and your children have left the nest, your money might be better well spent on other items rather than life insurance that will not be needed when the time comes that you are gone.
9. Do You Need Long-Term Care Insurance?
No one can predict the future; however, it is possible to take a look back at your family history to determine if long-term care is a continuing trend from generation to generation. If your family suffers from dementia, or any other disease that has left them unable to care for themselves, long-term care insurance might be ideal. When you apply for the insurance while you are young and healthy, the premiums are lower and the chances of getting approved are higher. This enables you to ensure that you will get good care and that your loved ones will not have the stress of extraordinary bills on their shoulders.
10. Continue to Work
If you do not have grandiose plans to travel the world the minute you turn 60, consider working, even if it is part-time during your 60s. If your health and mind allow it, this is the best way to ensure financial security. The longer that you can delay taking your social security, the more you will get in the end. If you were to take your benefits early, which right now is age 62, you would only receive 75 percent of the money you are entitled to. On the other hand, if you wait until you are 66, supplementing your income with a part-time job, then you will receive more social security income when you need it the most (your older years).
11. Re-examine Your Monthly Expenses
As you think about retirement, you can begin to wither your monthly debts away. Do you really need cable TV with 150 different channels or do you really need to pay for that car every month? If you really examine your monthly expenditures, chances are you can find ways to dwindle the amount down that you are obligated to pay, enabling you to save more money and enjoy your retirement more than if you were laden with numerous debts.
12. Stay Social
Staying social is perhaps one of the hardest things to do in your 60s, but one of the most important for your health. If you retire, you will not have the daily conversations that go on in the office any longer. You might not think you will miss them, but after a week of talking to yourself or even your spouse, you will realize just how valuable those conversations were. Before you retire or shortly after, make sure to join clubs, make dates with friends, and find other ways to stay social as this will benefit your emotional and physical health.
13. Make Sure Your 401(k) is Maxed
If you have not consistently kept up with the maximum contributions in your 401(K) account, now is the time to do so. Every year, there is a maximum amount that you can contribute to your account as well as a separate, “catch-up” maximum. If you are behind, find out the maximum for that year and contribute it if you are able. For example, in 2015 the maximum catch-up amount is $6,000 on top of the $24,000 regular contribution maximum.
14. Change Your Investment Strategies
In your younger years, you do not have to be as conservative with your investment strategies as you should as you near your 60s. Your younger years are the time to take chances (as long as you are diversifying your accounts), but as you get older, you will need to get more conservative. The older that you are, the less time you have to recover from a financial disaster, should a portion of your investments go downhill, which is why changing your investment strategies evry few years is essential.
15. Decide if You Should Delay Retirement
Did you start saving for retirement late in life? Or maybe you did not save enough through the years. Neither of these situations means you will never retire, but they do mean that you might need to delay it. This does not have to mean working full-time until you cannot walk anymore; it could mean going into semi-retirement (working part-time in the same industry) or finding a new career altogether – one that you enjoy but still brings in a decent income. This decision should be made before you hit your 60s so that you have time to adjust financially as well as emotionally since life will be a little different than you anticipated.
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