You may be on the cusp of retirement in your 60s. And hopefully your savings will suffice. Read on to see what people your age have socked away for their senior years.
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By the time you reach your 60s, retirement may be something you’re about to experience. So it’s important to go into retirement with a solid amount of money in your IRA or 401(k) plan.
Data from Northwestern Mutual’s latest Planning & Progress Study, however, reveals that the average 60-something does not have a lot of money saved for retirement, with the typical balance coming to just $112,500.
Now, $112,500 is a decent amount of money. But given that your retirement could last 20 years or more, when you think about it that way, it reads like a less sizable sum.
In fact, for many years, financial experts advocated withdrawing from savings during retirement at a rate of 4%. At this point, that guidance may be a bit outdated, and many experts will tell you to stick to a lower withdrawal rate. But even if we go with 4%, with a savings balance of $112,500, you’re looking at an annual retirement income of $4,500, or $375 a month.
Of course, most seniors end up with Social Security income on top of what they can withdraw from savings. But all told, if your balance is $112,500, or somewhere in that vicinity, it means you’ll need to prepare to manage your money very carefully once retirement rolls around.
Stretch your nest egg as much as you can
Because Americans are living longer these days, it may be conceivable for you to delay retirement a bit and add more money to your nest egg. But if you’re already in your 60s, you’re talking about a few more years of contributions and not a lot of time for your money to grow via investments. So all things considered, you may need to make the most of the savings you already have.
The good news is that you may not have a mortgage payment anymore now that you’re in your 60s. And in retirement, some of your other expenses might shrink. You won’t, for example, have to spend money commuting to a job you no longer have.
But still, you’ll need to budget carefully if you have a smaller nest egg to work with. You might also need to make some lifestyle changes.
That could mean downsizing to a smaller home or giving up a car and using public transportation if the cost of vehicle ownership is too much given your income. You may also need to commit to low-cost and free entertainment to stay busy rather than spend a lot of your money on things like theater tickets.
Consider working to boost your income
Retiring with a smaller nest egg isn’t ideal. But based on the data above, if you go that route, you may be in good company.
On top of taking steps to manage your money carefully, consider working in some capacity once your retirement kicks off. You don’t even have to work in your former field or do anything that limits you to a preset schedule. Instead, you can join the gig economy.
If you’re an avid cook, see what it takes to become a private chef. If you love music and play several instruments, give lessons for money. And if you enjoy nothing more than spending time with animals, become a pet-sitter.
You deserve to enjoy your senior years after a lifetime of hard work. If your nest egg isn’t as robust as it could be, boosting your income with earnings from a job could really go a long way.
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