11 Money Moves You Need to Make in Your 60s — and Beyond

Investing in your 60s is a time of transition. No longer are you focused on growing your retirement funds. Now, it’s time to crack into that nest egg.

So, you need to change your investment strategy. The idea is to withdraw enough to help you get by while holding enough in reserve to finance the rest of your life.

Here are 11 pointers:

1. Estimate how long your savings must last

Sand running through hourglass
Still Life Photography / Shutterstock.com

You can’t plan effectively without an idea of how long your money should last.

Of course you can’t know how long you’ll live, so we’re talking about estimating the longest you might live, so you won’t run out of money too soon.

A 65-year-old woman can expect to live to nearly 87, and a man who is that age can anticipate living until 84, says the Social Security Administration, whose Life Expectancy Calculator gives a rough idea of expected lifespans.

2. Calculate annual expenses

List of expenses
Casper1774 Studio / Shutterstock.com

To plan your finances in retirement, you’ll need specific spending data, not estimates. If you budget and have tracked your spending, you’ve got the data you need. If not, start now.

Automatic tracking is simple with tools like those provided by Money Talks News’ partner You Need a Budget. But a notebook or spreadsheet also will do — as long as you keep it up.

After tracking for a few months, you’ll begin to see where your money’s going and can decide how much to withdraw from investments.

3. Fully fund emergency savings

Life ring in sand
Andrey_Popov / Shutterstock.com

Keeping a cushion of savings in cash or short-term CDs lets you ride out market downturns without selling stocks at low valuations. Some experts advise having a big enough emergency fund to support yourself for 18 months to two years.

4. Plan your withdrawals

Senior man at writing desk.
VGstockstudio / Shutterstock.com

Retirees need a system for regular cash withdrawals. For example, one popular system suggests withdrawing 4% of your initial savings balance each year, then adjusting that amount annually for inflation.

The 4% rule is not ironclad, but it does provide a framework. The key is to adopt a system, then adjust it as necessary.

5. Seek safety

Construction safety gear
Igor Sokolov (breeze) / Shutterstock.com

How much you keep in CDs, bonds and high-yield savings accounts depends somewhat on how much safety you require. Intelligent risk is necessary with part of your investments if you don’t want inflation to erode your portfolio’s value.

Many retirees follow this rule of thumb (called the “glide-path” rule):

  • Subtract your age from 100. The resulting number is the percentage of your investments you should hold in stocks.
  • Invest the remaining amount in bonds and money market funds.

If you’re 70, for example, keep 30% of your portfolio in stocks — including mutual funds and ETFs — and the remaining 70% in bonds.

Does this rule provide enough growth to keep a portfolio going strong? Experts disagree.

If you also have doubts, find a fee-only financial planner and discuss a plan that makes sense for you. A service like Wealthramp can help you locate a great adviser.

6. Don’t neglect growth

Person watering potted plants
wissanustock / Shutterstock.com

The other end of the retirement seesaw is the need to grow your nest egg, at least a little.

Unless you have so much money that you don’t need to worry about inflation, you’ll need some growth investments. Usually, that means individual stocks, mutual funds and/or ETFs.

Learn more about investing in “10 Tips for Sane, Successful Stock Investing.”

7. Plan for required minimum distributions

Money
ElenaR / Shutterstock.com

After age 70 ½, the Internal Revenue Service requires savers to begin taking minimum annual withdrawals from some tax-deferred accounts, such as traditional IRAs and 401(k)s.

These minimum withdrawal amounts are calculated by the IRS based on life expectancy and account balances. The IRS rules are specific and inflexible about how much to withdraw and when. Ignore them, and you could face stiff IRS penalties.

8. Keep a lid on spending

Dealing cards.
Ivan Chudakov / Shutterstock.com

Financial discipline is crucial if you don’t want to outlive your money. Take an unsentimental look at your spending, decide how much to withdraw annually from savings and investments, and stick to that plan through bad times and good.

9. Get help now and then

Couple meeting with advisor.
wavebreakmedia / Shutterstock.com

When you manage your own money, it’s a good idea to pay an expert for an independent review at least occasionally.

So, consider hiring a Certified Financial Planner who works on a flat hourly rate to review your retirement plan, income and expenses.

Money Talks News founder Stacy Johnson discusses when and how to find a trustworthy financial adviser in “2-Minute Money Manager: How Do I Find a Good Financial Adviser?

10. Rebalance your portfolio

Rock cairn stacked by waterfall.
Netfalls Remy Musser / Shutterstock.com

You’ve decided what proportion of your investments to allocate to various types of investments, but over time your investments perform differently, throwing off your original allocation.

So, every so often — many experts suggest once a year — you’ll need to adjust, or “rebalance,” your portfolio to restore it to your original allocation choices.

11. Consider other sources of income

Shopping cart with boxes labelled with financial products.
William Potter / Shutterstock.com

Stocks and bonds are not your only investment choices in retirement. Two other possibilities are longevity insurance and annuities.

Longevity insurance starts payouts when you reach a specified age. You might pay $50,000 for a policy at 60, and start receiving payouts of $15,000 or more annually at 80, for example.

No doubt you’ve heard of annuities, which are financial contracts sold by insurance companies. There are several annuity types, so look before you leap. Or even better, get Stacy’s take in “2-Minute Money Manager: Should I Buy an Annuity?

Do you have experience with investing in retirement? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Popular Articles

Never Use a Debit Card to Buy These 9 Things
Never Use a Debit Card to Buy These 9 Things

Use your debit card for one of these expenses, and you could risk your bank account balance, your credit score or even identity fraud.

Why Your Cable TV Package Is More Expensive Than Ever
Why Your Cable TV Package Is More Expensive Than Ever

Due to this trend, Americans who still maintain pay-TV service are paying through the nose.

16 of the Most Outrageously Overpriced Products
16 of the Most Outrageously Overpriced Products

Retailers mark up products by hundreds of times their cost — but you don’t have to pay the premium.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Comments