Financial Planning in your 50s, 60s, and 70s - Retirement Guide

Retirement planning has timelines that you want to keep in mind while you are planning out your financials. Let’s take a look at how to plan in your 50s, 60s, and 70s.

Retirement planning has timelines that you want to keep in mind while you are planning out your financials. Let’s take a look at how to plan in your 50s, 60s, and 70s.

Your financial planning timeline

As you near retirement age, it’s likely that you have spoken with some sort of financial advisor to help you through the transition and make sure that your finances are in order. If you haven’t spoken to a planner and you are in your 50s, consider speaking with a fiduciary. They will work in your best interest and you’ll be able to rest easy knowing your retirement investments are in good hands.

When you’re in your 50s

By the time you are 55, it is recommended that you have four to five times your salary saved. If you are age 50 or older, you are able to contribute up to $6000 more a year to your 401(k) through contribution catch-up. This can be a great way to bulk up your retirement as many in their 50s are well-established in their careers and have more money to put towards savings.

Six months before you turn 60, you are able to gain some tax benefits. You can begin taking withdrawals from your IRA, 401(k), and other retirement accounts without a penalty. While many are still working at this age, some find it beneficial, though this does delay the start of Social Security benefits until age 70.

Reminder that now is also a good time to look into what is covered by Medicare and to build up your cash reserves accordingly. Try to reduce risk with your investments and consider speaking with a financial advisor to ensure you have covered all of your bases.

When you’re in your 60s

Once you turn 62, you are able to begin receiving your Social Security benefits. However, your benefits will be greater if you wait until you are 66. If you feel comfortable holding out until age 70, you’ll receive larger benefits. When you are 62, your benefits will be reduced by 25% and if you wait until you turn 66, you’ll receive no reduction in benefits. Be mindful that the earnings limit has the potential to reduce what you receive if you take your Social Security early but continue to work.

65 is the magic age when it comes to retirement. This is generally when Americans decide to retire, Medicare begins, and you can take your SS benefits with no penalty.

When you’re in your 70s

Again, 70 is the age where if you delay your Social Security benefits then you can end up taking more than 100% of your benefit.There is no reason to delay any longer, so be sure to begin your benefits now.

When you turn 70 ½ you are required to take distributions from your retirement accounts like your 401(k) or IRA. These are required minimum distributions. This is considered to be taxable income, so be mindful of this when you file your tax return.

If you are 75 and older, you can relax and enjoy your retirement. Check in with your accounts periodically and set up your estate plans, wills, and other end of life considerations. These types of conversations can be hard to have, but they are necessary for your family.

Financial planning looks different as you age and it’s important to be mindful of what changes as you near retirement.

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