Planning for retirement in your 60s

This is part 5 in our five-part series on saving for retirement at any age.

If you’re in your sixties, thoughts and dreams of your retirement are likely to be frequent. You may already have a solid financial plan that takes into account your income needs, your expected retirement date, your likely Social Security income and the income you can expect from your other retirement savings accounts. If you don’t already have a plan, you should make one sooner rather than later, as your retirement will be here before you know it, and you need to be prepared.

How much income will you receive from your retirement savings accounts? Which retirement savings accounts should you tap into first? What is the best strategy for when to start receiving Social Security benefits? These are not easy decisions and figuring out the legal and financial impact of each of the items that factors into them is not something you can calculate on the back of a napkin. If you haven’t already done so, now may be a good time to meet with a personal financial planner to get professional advice that will help you to make smart choices in pursuing a more financially secure retirement.

Estimating Social Security benefits

One of the things that you should do before pulling the trigger on your retirement is to create an account on the Social Security website. You’ll learn how much you have paid into the program and how much income you can expect from it in retirement. The site allows you to model a variety of filing scenarios related to retirement ages and spousal benefits so that you have all the information you need to maximize this source of retirement income. That information will enable your financial planner to give you better advice and will help you to make smarter choices about when you and your spouse should file for your Social Security benefits.

Filing for Social Security at a later age

• Working longer. If you are still physically able to keep working, one of the best ways to boost your retirement income is to work longer and delay filing for Social Security. It not only adds a few more years of retirement savings into the mix and reduces the number of years you will tap into your retirement savings, it also significantly increases your monthly Social Security benefits. Those who file for Social Security at age 62 receive lower monthly benefits compared to those who wait until age 65 to file. Those who wait until age 70 to file for Social Security receive even higher benefits.
   
  Working until 65 or 70 is not an option for all workers – some can’t work for health reasons and some simply want to retire at a younger age. But if you have limited retirement savings, are concerned about increasing your retirement income and are physically able to work, staying in the workforce just a few years longer may be a good option for you.
• Retire, but file for Social Security later. Another option is to retire and live on just the income from your retirement savings accounts until you reach age 65 or 70 and are eligible for higher monthly Social Security benefits. This is only an option if you have sufficient retirement savings, of course, but if you do, calculating the benefits of this strategy may be worthwhile.