Investing at 60 and Beyond: Pacing Yourself for a Secure Retirement

Investing at 60 and Beyond: Pacing Yourself for a Secure Retirement We're finally at the last post in this series, aimed at those of you who are age 60 and over -- or interested in a little advance planning. Here are your tips:

Assess your situation. When, exactly, you decide to stop working can be a major game changer. In general, Americans are working longer these days, because we're healthier, but also because it allows us more time to save, and postpones tapping into what we've already saved, allowing that money more time to grow -- and to bounce back from the lows of the last few years. In a 2010 survey, 57% of workers said they expect to retire at age 65 or later, and 24% are ready to stretch their employment past age 70. If the decision to leave your job falls on your shoulders -- and in this economy, it might not -- you need to think long and hard about whether you can afford to retire yet. There are a few good calculators that can help you, but I like this one from T. Rowe Price.

If you're forced to retire early or you can't pass up a buy-out, but still need -- or want -- to continue working for a few more years, do a little soul-searching to figure out what you'd like to do, even part time. Many older workers use retirement as an opportunity to start a small business or pursue a passion. AARP also has a good job search tool.

Pace yourself.
If you're holding onto your job for a few more years, you can continue following the advice I posted for people in their 50s, provided you keep tabs on your asset allocation and make sure it remains appropriate for your age. But if retirement is right around the corner -- or you've already retired -- you need a very realistic cash flow plan, says Mary Alpers, a certified financial planner in Colorado and a member of the Alliance of Cambridge Advisors.

"Usually in the first five years, whether or not you're still working part time, you spend the most money on discretionary expenses," says Alpers. "After that most people have sort of been there done that, and they tend to pull back." That means you really need to focus on reining in your front-end expenses, so you don't go out of the gate too fast. Put yourself on a budget by the month or even week, based on your total income, including any earnings, your Social Security income, and how much you can withdrawal from your retirement accounts. Which brings me to ...

Set a withdrawal rate. Retirement planning experts have set 4% as a rule of thumb, which means that in general, you can withdrawal that amount from your retirement accounts each year and your money should last as long as you do. But that 4% is a moving target, and you have to stay on top of things. If your investments are floundering, your 4% will be less than it may have been last year. If they're doing well, 4% could be a lot more than you need. These fluctuations mean you have to stay flexible. You should also give yourself a checkup every year or so to make sure your portfolio is still going to carry you through. To do that, sit down with a financial planner, or run your numbers through that T. Rowe Price calculator again.

Consider long-term care insurance. Age 60 is about the right time to buy, says Alpers, because you're still young enough that if your health is good, a policy will be affordable. If you have assets worth upwards of $2.5 or $3 million, you probably don't need long-term care coverage, because you'll be able to pay for it on your own. But if you fall below that threshold -- and many of us do -- and you can afford the premiums (they're pretty hefty, sometimes north of $1,800 a year, but the older you get, the more you'll pay), you should talk to an agent about your options now.

Start estate planning. If you plan to pass an inheritance on to your heirs, you want to work with an estate planning attorney, who can help you do it correctly. There are a lot of tax issues around inheritance that can be too complicated to navigate on your own (although if you just need a basic will, a health care proxy, and a durable power of attorney, you may be able to find document templates on the websites of your state bar association -- but I'd still have a lawyer look them over, just to be on the safe side). Just remember that your needs come first in this, says Alpers.

"Many people would like to pass on a legacy, which is understandable," she says, "but it's important to also look at taking care of yourself, and making sure that your quality of life is the best it can possibly be today."


Also in this series:
20s: Getting Started
30s: Boosting Your Health
40s: Envisioning the Future
50s: Getting Serious


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annawillim

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September 18 2013 at 2:48 PM Report abuse rate up rate down Reply
cor33

If a person honestly works hard for their money and saves, I don't think the government should tax you more because you've worked your rear off. We already pay too much in taxes. The answer is.....QUIT SPENDING.

September 15 2010 at 4:00 PM Report abuse rate up rate down Reply
Good day

Have to laugh at some of these "financial advisors" who write for those who earn enough to save enough for retirement. Not being a spendthrift, it is still difficult to meet the fixed expenses per month and put a large chunk of change away. My guess is that most people are in the same boat. Many employers do not offer 401k plans and pensions went by the wayside, unless you are a government worker.

September 15 2010 at 12:51 PM Report abuse rate up rate down Reply
ThinkUp70

Nobody can live in a car or use stock certificates as a blanket to keep you warm at night. A paid for roof over your head, a good used vehicle, some money saved in the bank, and maybe a paid for small rental, (just in case the kids have to come home), is all anybody would need nowadays.

September 15 2010 at 12:17 PM Report abuse +1 rate up rate down Reply
toosmart4u

A vote for the republicans this fall is a vote to end social security and medicare. Do we think the health insurance industry will give up a good monthly premium we can afford?

September 15 2010 at 12:07 PM Report abuse -1 rate up rate down Reply
godoedoe

I OH DO WE KEEP OUR MONEY FROM OUR ESTATE FROM GOING TO THE GOVERNMENT?

September 15 2010 at 10:59 AM Report abuse +1 rate up rate down Reply
1 reply to godoedoe's comment
Janet

It amazes me how the young people of our country are expected to fight and die in foreign wars but the old people are all about the evil of taxes and paying for these wars - you can't have one without the other. Which is more patriotic - dying for our country or paying taxes so young people can defend us?

September 26 2010 at 9:27 AM Report abuse rate up rate down Reply
ingfp

We all will have to work longer and smarter. You can invest smartly such as using, Stop Losses in your brokerage acct to prevent big set backs, Indexed annuities to create an income you can't outlive having an emergency fund for those unexpected problems that always pop up when least expected. It isn't rocket science, just good business and common sense.

September 15 2010 at 7:39 AM Report abuse rate up rate down Reply
diane

ANYONE WHO PUTS MONEY IN THE STOCK MARKET IS NUTS..THE RICH STEAL FROM THE POOR THE MARKET IS FULL OF FREE LOADERS WATING TO STEAL YOUR PENSION PLANS TOO. THE MARKET CREATED A LOT OF BERNIE MADOFFS..GREED IS DESTROYING AMERICA...

September 15 2010 at 5:07 AM Report abuse +3 rate up rate down Reply
2 replies to diane's comment
Robert & Lisa

Actually, greed isn't the problem. Government intervention is. Greed causes people to work hard and produce more to have better lives for them and their families which helps raise everyone's standard of living. Government red tape and restrictions cause people to produce less causing a decrease in standard of living.

September 15 2010 at 7:00 AM Report abuse -3 rate up rate down Reply
Janet

Robert and Lisa, so you really don't think the big banks and Wall Street caused this recession and melt down as result of their greed? They also will sell you some gold coins and you will buy!

September 26 2010 at 9:30 AM Report abuse rate up rate down Reply
adavis1527

Make sure that those intent on stealing your legacy from your children are told that no matter how much you save by being thrifty, the Government is not entitled to what you worked hard to earn and save and what you have created by being thrifty. Only those who spend more then they have to spend would need your money to meet there expenses. These governmental officials need to learn how the rest of us learned to control our urges. Apparently these elitists do not have any self control and may be missing frontal lobe function or want us to think their addiction to spending in uncontrolable. Are we really that as stupid as they think we are?

September 15 2010 at 12:43 AM Report abuse +4 rate up rate down Reply
1 reply to adavis1527's comment
Janet

YOu should be ashamed - your children need protection from your hatred of our country. It amazes me how the young people of our country are expected to fight and die in foreign wars but the old people are all about the evil of taxes and paying for these wars - you can't have one without the other. Which is more patriotic - dying for our country or paying taxes so young people can defend us?

September 26 2010 at 9:40 AM Report abuse -1 rate up rate down Reply
brt55225

Sometimes getting a parttime job after retirement isnt all about the money... but it can help with Sales Tax Hotel Tax School Tax Liquor Tax Luxury Tax Excise Taxes Property Tax Cigarette Tax Medicare Tax Inventory Tax Car Rental Tax Real Estate Tax Well Permit Tax Fuel Permit Tax Inheritance Tax Road Usage Tax CDL license Tax Dog License Tax State Income Tax Food License Tax Vehicle Sales Tax Gross Receipts Tax Social Security Tax Service Charge Tax Fishing License Tax Federal Income Tax Building Permit Tax IRS Interest Charges Hunting License Tax Marriage License Tax Corporate Income Tax Personal Property Tax Accounts Receivable Tax Recreational Vehicle Tax Workers Compensation Tax Watercraft Registration Tax Telephone Usage Charge Tax Telephone Federal Excise Tax Telephone State and Local Tax IRS Penalties (tax on top of tax) State Unemployment Tax (SUTA) Federal Unemployment Tax (FUTA) Telephone Minimum Usage Surcharge Tax Telephone Federal Universal Service FeeTax Gasoline Tax (currently 44.75 cents per gallon) Utility Taxes Vehicle License Registration Tax Telephone Recurring and Nonrecurring Charges Tax Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. We also were A Common Law Country! I have set up a place that the poor and middle class in the country can start to get some of this tax money back. It is our turn to have a piece of the action. Here is my way to get your loot back. Just google EASY STOCK CASH and click the first link. Once you get there, go right to the PENNY STOCK page to see what the rich don't want you to know.

September 14 2010 at 8:59 PM Report abuse +2 rate up rate down Reply
1 reply to brt55225's comment
Dismayed

This is an ad and doesn't belong here. Is AOL now censoring "Business News" as well as "Politics News?" A commemt I posted before this just disappeared along with all the other comments. It was about how untrustworthy Barney Frank and Chris Dodd are and how we cannot depend on any legislation they passed to regulate financial institutions. Dodd accepted sweetheart mortgages from Countrywide and should be in jail. Frank allowed Fannie and Freddie to go bankrupt choking on subprime mortgages pushed by Clinton and later Obama (for Acorn). Frank even claims he didn't know his boyfriend was running a prostitution ring from Frank's home. And that other nimrod, Charlie Rangel, who is responsible for taxation and the AMT tax that plagues more and more ordinary folks says he didn't know he wasn't supposed to have so many rent controlled NYC aprtments meant for people of modest means. And He didn't know he was supposed to pay taxes on his rental property in the Caribbean. Don't be distracted: Vote the bums out and lessen your tax footprint. Those clamoring for more givaways don't eaven pay taxes.

September 15 2010 at 8:35 AM Report abuse +3 rate up rate down Reply