Financial planning in your 60s

One's spirit and zest for life may never age, but financial planning in the 60's is often more practically linked to retirement considerations for good reasons. Whether it be having enough money to retire, being financially able to choose new lifestyles or knowing one doesn't have to continue working if necessary are some of the reasons financial planning in the 60's is useful.

Financial strategy during these years ideally edges toward a more conservative allocation of market based retirement assets so as to lower risk as one prepares for retirement. The reason for lowering risk in the 60's is because owning high-risk investments just prior to retirement entails a greater probability of fluctuations in asset worth which can be detrimental to a retirement plan if those assets have swung to low valuations at the time of retirement. There are several considerations one may think about when in the 60's.

• Having enough money to retire
• Financially accounting for a shift or change in lifestyle
• Preparation of expenses that may not exist in earlier years
• Feeling monetarily able to make new decisions and choices

For many, retirement income is generally lower than the working income because social security payments may be calculated as a fractional percentage of the last few years of working income which amounts to a lower income in retirement if no other sources of income exist. For this reason it can be quite prudent to prepare for retirement using a comprehensive and thought out life stage financial plan. Such a plan may include one or more of the following factors.

• Shifting of market based assets into more conservative investments
• Conversion and/or rollover 403B's
• Assessment of social security payments and/or pension plan payments
• Calculation of cost of living after retirement
• Property relocation, purchase and/or sale
• Distribution of annuity and/or retirement savings

Another financial variable one may consider in the 60's is health whether it be supplemental insurance, long term care insurance, prescription plan insurance etc. being ready for changes to one's health whether such changes are imminent or not is a prudent consideration as health related decision could end up saving a lot of money.

If one begins to receive retirement distributions in one's 60's, tax planning is also important as receiving too much taxable income in one year such as through a lump some payment and then reallocating those funds could end up costing one a large amount in taxes.

If one is not financially ready to retire in the 60's strong decisions can be beneficial. For example, in a worst-case scenario where one has no pension, social security, health care etc. serious thought should be given to how one will survive in later years. This may or may not involve purely financial decisions but may include choices that affect one's cost of living so that retirement is possible.

Examples of the aforementioned decisions include downsizing of a mortgage, paying off an automobile, relocating to a city or region with a lower cost of living, and finding a state that has more favorable policies for people nearing or entering retirement. There are often at least a few options available to persons in their '60's even if financial planning has never been a strong suit or concern.

Monetary record keeping and review can also be a good idea in the '60's. This may involve going through retirement plans, accounts, pension plan documents, social security distribution estimates, insurance documentation etc. to make sure 1) what is owed within a pension or government retirement plan is accurately accounted, 2) one has applied for pensions and health benefits at the pre-determined time and 3) that one has reviewed insurance distribution and other retirement plans for most optimal distribution without penalty. If these tasks seem overwhelming, enlisting the assistance of a financial planner, tax advisor and/or insurance agent may be well worth the time. In other words, asking as many questions as possible can help avoid several circumstances such as the following.

• Avoid unforeseen financial scenarios
• Minimize taxation of income, property and assets
• Reduce fees, costs and/or expenses
• File for benefits on time to avoid disqualification
• Properly account for inflationary changes to value of money

Financial circumstances in the 60's can vary quite a lot between person to person and for this reason, properly understanding what one's net worth is and what one's net worth will be at or after retirement are useful. Moreover several factors are generally more important in the 60's than at earlier ages. These factors include 1) net worth 2) income 3) cost of living and 4) financial forecasts of post 60's years.

How long one lives generally increases the total amount of money one will need, and thus making sure one's present and future savings and income will be enough to last a full life is also quite important. This may involve preparing a financial plan before it is actually used. For example, the following questions can be useful in preparing such a plan.

• Will one have to pay rent or a mortgage and for how long?
• What will one's expenses be like in 10 years? 20 years? Or longer
• How much will the cost of living rise due to economic conditions?
• Are insurance costs and premiums going to increase?
• Is enough money allocated to unforeseen expenses or costs?

In review, the 60's are a unique time in one's life where financial planning can be especially important. This is because 1) retirement may be on the horizon 2) changes in income may occur and 3) lifestyle adjustments are often a consideration. Such being the case, specific financial planning tailored to persons in their '60's are prudent whether or not one plans on retiring or not.

It may simply be wise to be prepared for retirement whether or not that is one's choice. Generally, reviewing one's financial records, meeting with financial planners, forecasting lifestyle adjustments and costs and being financially prepared for the future of importance in the 60's. Thus, knowing the financial reasons to adjust, and/or review a financial plan in the 60's is a key element of financial planning in the 60's.