Saving for Retirement at 60
Are you sixty years old? If you are, you may be preparing for retirement. As excited as you may be about no longer have to work, can you really afford the transition? If you haven’t been preparing for retirement, it isn’t too late to get started, but you need to get started now.
The first thing you will want to do is start contributing to your 401(k) program. At this point in your life, any contributions that you can make, you should. At the very least, contribute 5% of your income. However, know that many employers will match contributions made by their employees. There is a minimum amount that you must contribute to receive this matching. If you do, you can essentially get free money for your retirement.
Next, you will also want to consider opening a Roth Individual Retirement Account (Roth IRA). At your age, you are able to deposit more money into your account than those younger than you. When you go to withdraw the money, it is tax-free, as long as you wait until the right time to make your withdrawal.
Next, you will want to examine your retirement wants and needs. Typically, this is the first step that you take. However, if you haven’t been saving for retirement, it is imperative that you get started soon. Depositing any extra money that you have right from the start can help you get ahead in your goal to save for retirement.
Returning back to your retirement needs, examine your housing. Is your house costly to maintain? If it is and if there isn’t much sentimental value attached to your home, consider relocating to a more affordable housing option. In fact, you may want to closely examine retirement communities. Most are affordable to live in and you are automatically paired with neighbors that are your age, many of which will share your interests.
It is also important to examine your retirement wants. What do you see yourself doing when you retire? If you are like most retirees, you will likely want to do things other than stay at home watching television. Do you want to travel? Do you want to start your own business? Are there other activities that you want to enjoy, such as camping, boating, or fishing? If so, it is important to examine these costs and add them to the estimated amount of money you need to save to retire comfortably.
Next, it is important to learn to cut corners. Do you live in a fixed income? If not, it is time for you to start. When in retirement, most men and women are on a fixed income. For example, if you were to spend your retirement savings before you pass away, you are essentially left with nothing. Is this really how you want to live? It is important to practice living on a fixed income. If you find that you cannot do so, you have a small amount of time left to increase your retirement savings by working longer.
Now is also the time to examine your debt. Do you have any? To see, request a copy of your credit report. Usually, the companies that you owe money to will try to collect. This may involve a request to appear in small claims court. Should this happen to you, you may be court ordered to pay the money. This can put a damper on your retirement savings and plans. Eliminating this from happening by making sure that all your debts are paid off before you retire.
One question that many individuals in their sixties have involves paying off that debt. Many wonder how they can pay off their debt when they are also supposed to be saving for retirement. The two actually go hand-in-hand. When you pay off your debt, you should have more money for retirement in the long-run. Also, you can work to save money by eliminating unnecessary purchases or temporarily supplementing your income with a second, part-time job. A good approach to take is dividing the money into two. Some money can go towards your unpaid debt and the rest can go into a retirement account.