Financial Planning Checklist at Age 60

retirement plan planning

Question: Boohoo!  I’m turning 60 this month.  What are some of the financial matters I should review and get ready for as I enter my 7th decade on this planet?

Answer:  Congratulations!  You are now entering your third trimester of life, and financial planners today are planning client’s retirements out to age 100 to coincide with our extended life expectancies. To prepare you for this adventure financially, I offer you the following checklist:

1) Review your financial position.  Make a net worth statement listing all of your assets and liabilities.  This will give you snapshot of where you stand.

2) Make a decision about when you plan to retire.  You can change your mind later, but you need to have a target date in mind now.  Never is an acceptable answer, but keep in mind that you are going to slow down someday whether you like it or not.

3) If you haven’t received a recent letter from the Social Security Administration with a statement of your earnings and your projected benefits, then call them and ask for one.  Know your "full retirement age" (FRA).  For those born between 1943 and 1954, it’s 66.  FRA for those of you born between 1955 and 1959 can add two months to 66 for each year after 1954, and if you were born in 1960 or later, your FRA is 67.

4) Decide how much income you will need each year during retirement.  Then run the numbers and see if you have enough assets to support it.  If not, you will have to extend your planned retirement date or reduce your income requirement.

5) Decide when you plan to start withdrawing social security benefits.  Know what benefits are available to you and your spouse. Even though you can start at age 62, you could be better off waiting until you reach full retirement age or even age seventy.  Your analysis should include your future expected income tax bracket, your marital status and the age of your spouse.  If you plan to work until age 70, hold off on filing for benefits until then. If you can wait until age 70, the result will be greater benefits for you and greater benefits for your spouse for the rest of her life, because the spousal benefit is tied to your benefit.

6) Review your investment policy.  Have your goals or your financial situation changed? You may need to revise your long-term strategy.

7) If you plan to start making withdrawals from your retirement plan to support your other income within the next five years, identify the source of those withdrawals.

8) If you don’t have Long-term Health Care Insurance, look into it.  Make sure you understand what coverage it provides so you can understand why you might need it and how it complements Medicare and other health insurance.  Don't wait.  The older you are when you buy Long-term Health Care Insurance the more it will cost. And if you wait you risk developing a health issue that will preclude you from being eligible.

9) Review your life insurance policies.  Are they still appropriate? 

10) Visit your estate-planning attorney and make sure your will, trusts (if any), and health-care directives are current. 

 

Kenneth B. Petersen CFP®, EA, MBA, AIFA® is an investment advisor and Principal of Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey.   He welcomes questions that you may have concerning investing, taxes, retirement, or estate planning.  Send your questions to: Ken Petersen, 2340 Garden Road Suite 202, Monterey, CA93940 or email them to ken@montereypw.com.