For most people, your 60s is the decade in which you retire. You've worked your butt off for the past 40 years or more, and you're probably looking forward to kicking back and relaxing in retirement.
But are you ready? The median retirement savings for people in their 60s is only $172,000. If you think retirement will last 30 years, that's only $5,700, not accounting for continued growth or income from pensions or Social Security.
Can you make this amount last? If this number scares you, it's not too late! Here are some tips on how to plan and for retirement in your 60s.
Cut Costs and Create a Budget
Now that you're in your 60s, you probably have much less in expenses. Your kids are probably long out of the house, and you hopefully have your mortgage paid off. Do an in-depth analysis of your spending. Where are you spending too much money? Cut where you can.
If you don't have your house paid off, consider downsizing. A smaller house usually means a smaller mortgage, less spending on utilities, and probably fewer property taxes.
After you've examined your expenses and cut where you can, create a budget to stay on track.
Examine your Investments
What does your asset allocation look like? Are you set up appropriately for your goals? Just because you are in your 60s doesn't mean you have to throw risk taking out the window.
Closely look at your investments. Allocate between stocks and bonds appropriately. If you have to catch up on your savings, don't speculate with your investments. Invest and save diligently and with purpose.
Save, save, save!
You learned this in last weeks post, so you know you have the ability to catch-up in savings. If you have an IRA, you can save an extra $1,000 per year. If you have a 401(k) you can save an extra $6,000 per year. Or if you have a SIMPLE IRA, you can save an extra $3,000 per year.
If you get a raise or a bonus at work, save it right away. After you go through your expenses and cut where you can, save all that extra money you uncovered. Just save as much as you can.
Develop a retirement mentality
With retirement right around the corner, it's time to figure out what retirement is going to be like. Hopefully, at this point, you have discussed with your spouse what your plans are for your second act, and now it's time to give it a few test runs.
If your job lets you, take an extended vacation. On this vacation, do what you are planning on doing in retirement. What does your day to day look like? Do you think you can live that life for the next few decades? Do you plan on living in a different state or country? Can you afford to live that lifestyle?
Income during retirement
Do you have sufficient retirement savings? Or maybe you are lucky and will receive a pension? How much will you receive in Social Security? It's very important to figure out how much you can expect for income.
What's your spending like?
How much in annual income will you actually need? Do an in-depth look at your spending. What do your bills look like? Do you have a significant amount of necessary spending? How much are you spending on fun stuff and luxuries?
Taking a really close look at your spending will give you a great idea of how much you should cut in spending and how much income you will need to stay in the green every month.
Where you receive your health insurance from will greatly depend on how long you work for. If you plan on working into your late 60s or even your 70s, your employer will probably be your source for health insurance.
On the other hand, it may be less expensive to sign up for Medicare and purchase some supplemental coverage.
Your occupation before retirement may also decide your health insurance coverage. Some professions, public school teachers, for example, have excellent benefits for retirees.
Should you delay?
Maybe your retirement savings isn't enough for you to retire right now, or maybe you just love what you do, whatever the reason, it might behoove you to continue working.
Though this isn't an option for everyone, it could help you increase your retirement savings and will increase your monthly Social Security benefit payment.
You are in the home stretch, so you need to do whatever you can to increase your savings and plan for the retirement you've dreamed of.