As someone in your 60s, you likely have many years of money management experience under your belt. But financial needs (and wants) often change with every life stage. Financial preparation starts with a careful evaluation of where you are and where you want to go.
Having a firm handle on your finances could help you better prepare for tomorrow — and retirement. So, whether retirement is just around the corner or a few years away, some basic budgeting tips could help you get through your 60s with confidence.
A Change in Strategy
According to a 2019 survey from the Employee Benefit Research Institute, only 23 percent of workers feel very confident about having enough money to retire comfortably. Are you a member of this group? If not, it may be time to change your planning strategy.
Consider creating a list of your planned income streams in retirement, including any pensions, Social Security benefits, personal savings, rental property incomes, etc. Then, take a look at your outgoing expenses to see how much money you'll need every month.
Comparing the two figures could help you determine if you have enough money for your retirement. What is the difference between what you need and what you have? Seeing the numbers on paper could help you determine if a change is in order.
A Discussion of Debt
Debt could push back your retirement date — or even make it impossible for you to retire at all. The fewer financial obligations you have in retirement, the longer your financial cushion may last.
Consider going through your finances and making a list of your debt, including revolving credit card balances, auto loans, home equity lines of credit, student loans and mortgages. After adding up the monthly payments for all of your accounts, think about creating a plan to pay them off before you retire.
Working an extra year or two could help you retire debt-free. A part-time job is another option that could help you put additional funds towards your debt every month.
A Change of Scenery
As you inch closer to retirement, your wants and needs may change. Your three-bedroom house may start to feel much too big, and your expansive backyard may become more of a burden than a blessing. For some people in their 60s, the solution to this is downsizing to a smaller home.
Downsizing is one way to stash away some extra money every month, as costs for home maintenance, repairs and utilities are often less in smaller spaces. This money could be put toward your retirement savings or other long-term savings goals.
But a house isn't the only thing you can downsize! Some retirees find that they don't need multiple vehicles — or scale back on things like cable packages, cell phone plans and other subscription services.
A Little Help
A financial representative can help you go through your finances and determine what potential pitfalls you might be facing. A representative can also help you figure out if you're on the right track to retirement, how long your money may last — and whether or not your investments are appropriate for your circumstances.
Do you want to spend your days gardening — or traveling through Europe? A financial representative can help you create a plan to achieve your individual goals. You can also talk to them about estate planning and what you hope to leave behind as your legacy.
Budgeting tips for your 60s aren't much different than budgeting tips for your younger years. But as life changes, needs and wants often follow suit. Determining your priorities, weeding out unnecessary expenses and focusing on your long-term goals could help you better prepare for tomorrow.