Doin’ It By the Decade: What NOT to Do in Your 60’s

If you’re in your 60’s, you’ve made it pretty close to that big financial goal of a happy retirement. Hopefully. But whether you are cruising there on easy street or struggle like crazy to catch up and hopefully just retire sometime before you die, here are some pitfalls to avoid in your 60’s.

You're so close to retirement! Don't mess up in the final sprint!

You’re so close to retirement! Don’t mess up in the final sprint!

Here’s what NOT to do:

1.)   Become very conservative with your investments.

Make sure to really do your homework regarding your retirement portfolio allotment. It should certainly not look exactly like it did when you were in your 30’s, but it should probably still look more aggressive than you might be inclined to think. Retirement is often 30+/- years long. That might be longer than you’ve even had that account open. It’s a very, very good idea to schedule an appointment with a financial planner for a retirement fund check-up.

2.)   Keep bailing out your kids.

Because when you have no retirement plan, they will need to bail you out. For the next 30+/- years.

3.)   File your taxes exactly the same after retirement as before.

Once you switch over to easy street, your taxes should be much lower than when you were working. This could be a good year to talk with a professional tax preparer. Also, many retirees spend a lot of time volunteering. Make sure you deduct all you car mileage and other costs associated with that activity on your taxes.

4.)   Take financial advice from every Tom, Dick and Harry who offers it. And your kids.

Perhaps your neighbor or child is actually an accountant, financial advisor or someone with legit credentials – go for it (still carefully, I’d think, you’re risking important relationships if their advice is crummy). Otherwise, consult a professional. Even if money is tight, it’s wiser to scrape together enough for a one-time session with a financial advisor than to ask your kid, who was asking for a loan to pay off their credit card last month, what you should be doing with your money.

5.)   Dive into retirement without a plan.

You need to figure out a distribution schedule that works for you, as well as when you will start claiming Social Security. The longer you can hold out on claiming Social Security, the better. For your 401(k) and IRA, you need to start taking withdrawls before you turn 70½ or you face a pretty stiff fine (50% of each withdrawl not taken). Be sure to consider what the tax consequences are based on what year you start withdrawing and how that will impact your tax bracket.

6.)   Taking up expensive new hobbies.

Retirement probably frees up more time than you’ve had in a long time. Clearly you need to do something to fill that time. Make sure to consider the long term cost of these hobbies (especially traveling) and make sure it fits in your retirement plan.

Be careful with bailing out grown kids AND taking their advice.

Be careful with bailing out grown kids AND taking their advice.

Still need help getting on the right financial track? You can win a free copy of Dave Chilton’s The Wealthy Barber if you enter my raffle. Contest ends on September 30th! 

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