4 Questions You Need To Ask Yourself Before You Turn 60

For the first forty or so years of your life, you will no doubt come into contact with the term “retirement” a lot. However, for the most part, it will go in one ear and out of the other. It will affect you in the same way news of climate change will affect you - it enough to make you raise your eyebrows and start putting cardboard in the recycling bin, but it isn’t pressing enough to make you change your ways entirely.

Well, that fabled thing called retirement is now knocking and your door and so it is time accept the financial decisions you have made up to this point. We’re not saying you can’t change certain things and make a little bit more of a difference to your circumstance, of course you can. However, it is time to start planning your retirement lifestyle based on your current financial situation. It is time to face the music, not live on a hope and a prayer.

You see, most people retire in their sixties. You don’t have to, but most do. That is why we have pulled together a list of factors that you need to consider. So, without further ado, here are the things you need the financial considerations you need to make before you hit the big six-oh.

How Long Are You Going To Work For?

This is the single biggest decision you need to make for the simple fact choosing when to quit work is going to affect your financial security more than anything else. This is when you will wave goodbye to your income and start relying on your savings. Of course, it isn’t just when to quit that you need to consider. It is what sort of retirement lifestyle you are going to lead? How much more could you save if you stayed working until 70? The health benefits of staying connected to the people you work with. And will you quit totally, or will your retirement involve some work?

What Help Are You Going To Have?

This may seem like an odd question, but retirement is expensive and retirement can be, well, unsafe for a few reasons, not least of all your health. That is why you need to know what level of help there is going to be. According to CaregiverConnection.org, you need to consider hiring a financial power of attorney while you are still mentally sound, someone that can make the right financial decision should you become unable. You need to know what help you will have should you become unable to live independently and whether you will receive help from your children in some way or have to pay for care yourself. This part of the debate should also include seeking help from a financial planner, someone that can talk you through your current financial situation and how to make the most out of your finances in retirement. We called it help, but a lot of it could be labeled advice, which gives it the positive spin it deserves.

When Will You Take Social Security?

The importance of this benefit cannot be stressed enough. In fact, choosing when to take your Social Security benefits is only second to deciding on when to retire because it will have one of the biggest financial implications during your retirement. To stress how important this source of income is, for one in four recipients it is their only form of income after retirement. That is why it so important you squeeze the most you can out of it, which is why timing is so crucial as you will see from this article on schwab.com/resource-center. What we mean is, for every year you delay triggering this benefit after turning 62, your monthly income rises from 6% to 8%. Of course, you have to start collecting it when you turn 70, meaning you will get the best deal possible should you manage to hold on until then. This may not be possible or ideal, but it is worth knowing when it comes to making a decision. 

How Much Income Will You Be Guaranteed?

This is an immensely important question to ask yourself. If Social Security is your only source of income then the math won’t take long. However, if you have multiple sources of income then a) count yourself lucky and b) make sure you know exactly how much you will be receiving each month. The same goes for your spouse - the final sum should be your total household’s monthly income. To do this, register with the Social Security Administration so that you can be sure you know what you are getting, speak to the HR department at your current employment - as well as the HR department at any former employers - and ask for a statement relating to your pension benefits. Once you know what you are getting each month you will be able to make an informed decision on whether you want or need to work longer, what sort of lifestyle you could lead with what you have and whether or not you need to scale back.