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Retirement in your 70s

| February 21, 2018
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By the time you reach 70, about 80% of Americans have retired. That said, your income will be or has been reduced because you aren't working anymore.

You will have to take some necessary steps to give yourself a better chance of sustaining your desired lifestyle throughout retirement.

Here are some steps on how to do that.

Create a budget

This is a common theme in my posts, but it is, without a doubt, the most important step. With a budget, you can, at a glance, see what your income is and what your expenses should be. To find out how to create a budget, click here.

Next step is comparing your budget to your actual spending. Go through your expenses for last month and see how it stacks up to what you have written in your budget.

Reduce expenses

After you've compared your budget to your actual spending, you probably have to adjust your expenses. The fact of the matter is that only 32% of Americans have a budget set up, and of that 32%, 70% compare it to their actual spending. With those stats, you probably need to trim your expenses. (Statistics brought to you by Credit Donkey).

At this point in time, you hopefully have your home paid off, which should reduce your monthly spending by quite a bit. Another step worth taking is selling a vehicle. Odds are you don't need two cars; this will lower expenses on gas, insurance, and probably a car payment.

If you live in a large house, one that's probably more than you need, consider downsizing. When you sell your home, you can use the equity in your current house to purchase the new, smaller one. Your property taxes should go down (depending on the area you move to), your utility costs should go down, and it will require less work to maintain. Win, win, win!

Healthcare costs

Healthcare is going to cost you more in retirement. Plain and simple. You are getting older, and your body just doesn't work as well as it used to. Plan for these costs by reviewing your Medicare coverage.

Here's a quick breakdown. When you turned 65 coverage started for Medicare Part A. You then would've had to sign up for Medicare Part B, unless you have group health coverage through your employer, then you can wait until you retire. Keep in mind, however, that you need to have Part B in order to qualify for the next two.

The next step (though optional) would be selecting a Medicare Advantage or a Medicare Supplement. Click each to get more information about each product. Due to regulations, what I can tell you is limited.

Long-term care insurance may also be a beneficial option. The annual premium for this kind of policy is usually, pretty expensive, but could end up saving you a lot of money if you find yourself in an assisted living facility or a nursing home.

Review your investment portfolio

Now that you've retired and won't be working, or you only work part-time, you will have less earned income. Additionally, you also have this nest egg that you'll need to use to supplement your income over the next couple of decades.

Your investment portfolio should be structured in such a way to minimize risk to your investment. This should not scare you away from stocks, however. True, you should be more conservative to preserve your principal, but it would behoove you to participate in the stock market to give your money the opportunity to grow.

Note: Invest according to your personal risk tolerance and time horizon. All investments carry risk, including loss of principal.


In addition to Social Security and a pension (if you were lucky to get one), you should have a nest egg that can be used to supplement your income. Once you hit the age of 70 1/2, you will have to start withdrawing a certain amount from your retirement savings. This does not include any money saved to a Roth IRA or Roth 401(k).

The amount you need to withdraw is based on your life expectancy. If you don't withdraw the required amount, you will be assessed a penalty of 50% of the amount you didn't withdraw.

For example, you are required to withdraw $10,000 from your retirement savings by years end. If you withdraw $0, you will pay a $5,000 penalty. Conversely, if you withdraw only $8,000, you would pay a penalty of $1,000 because you forgot about the other $2,000.

Consolidate and Organize

For simplicity's sake, it probably makes sense to consolidate all of your retirement accounts to one location. Makes it much easier to keep track.

Make sure your will and all of your beneficiaries are accurate and up to date. Get your papers in order. All important documents (deeds, insurance policies, account statements, and passwords). It may be a long time until any of this is needed, or it could be tomorrow. You never know, so it does not hurt to be prepared.

What to do with my time?

One more thing, make sure you are doing something with your available time. Go for walks with your souse, work part-time, or volunteer. Do something that keeps you active and happy. A financially stable retirement can set you up nicely, but being active and social can make for an extremely happy one.

Studies show that being active and social during retirement can improve your health and increase your longevity.


Retirement is your second act, and it could last 3 or even 4 decades. It certainly pays to prepare for it to last a few decades. Budgeting, investing correctly, reviewing your health insurance coverage, and staying active are just a few ways to do that.

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