If you are in your 60s and are thinking about retirement, it’s all about planning and saving – and the sooner you start, the better.
Planning helps you take a realistic look at a possible retirement age and what you’ll need to do to make that happen. Though, saving can get you to the finish line with enough money to help cover your post-work expenses.
When planning, you should review your potential retirement income sources, such as:
• Funds from your retirement account, such as a 401(k) or 403(b).
• Roth or traditional IRAs.
• Social Security.
• And any company pension you might have coming to you.
You’ll also want to review your estimated retirement needs, including looking at expenses you can expect during your retirement. Some of those expenses could be travel, entertainment and funding for hobbies you may have. Other questions to consider:
• Will you still be making house or car payments?
• Do you have regular medical expenses?
Now, you’ll want to think about your approximate retirement age. Run your projected income and expenses through an online retirement calculator to determine whether your goal is realistic based on your projected income and expenses.
After doing a retirement reality check, you may find that you don’t have enough money to meet your goals, but you can work on changing that – this could mean you’ll have to work longer than expected.
If you can, contribute as much as possible to your work retirement plan. The current 401(k) maximum is $18,000 a year, and people older than 50-years-old can add up to another $6,000 in catch-up contributions.
Consider contributing funds to an IRA and maxing that out each year. People over the age of 50 can make catch-up contributions to these as well.
Talk to a financial advisor about your investment portfolio to see if they are right for your needs. While aggressive investments can mean higher payouts, they can also be risky with the possibility of losing money. Find an investment mix that you feel comfortable with.
Consider paying off as many debts as possible so when the time comes to retire you won’t have big expenses such as a mortgage or long car payment.
If your savings potential is limited, some experts recommend considering selling your home and buying something less expensive.
You may even consider working a part-time job once you retire to keep some income flowing into your bank account.
When it comes to Social Security finances, it may be wise to think twice before taking your money out because the longer you wait, the more you’ll receive each month. This helpful estimator will give you an idea what your payment will be, based on at what age you begin taking Social Security: www.ssa.gov/estimator/.
Be sure to keep in mind medical expenses, any fixed costs you may have and unexpected expenses. Experts advise making sure you are covered by medical insurance until you are eligible for Medicare. Some recommend considering taking out long-term care insurance once you hit your 60s to help cover the expenses that extended care can bring.
Once you officially retire, you’ll need to be careful about not overspending with the money you have. It’s not uncommon to be retired at least 20 years or more.
City National Bank & Trust can help you plan for retirement by helping you pick a Certificate of Deposit with the term that best suits your financial situation. You can print and complete a New Customer Information Sheet here and bring it to any CNB branch to open your account today.