Scenario Planning

You&rsquo;ve reached your early sixties. That means you&rsquo;re definitely eligible for retirement - if you can afford it. Are you in good shape to retire? Here&rsquo;s a look at how you compare to others your age.&nbsp;

About This Class

Retiring between 60 and 64 can be mighty tempting. However, according to CDC projections, if you&rsquo;re in your early sixties, you&rsquo;ll probably live another 18 years or more if you&rsquo;re a man and 21 years or more if you&rsquo;re a woman.1 That&rsquo;s a long time to go without a paycheck. Considering the cost of healthcare and long-term care and factoring for inflation, now more than ever you should plan for a longer life.
In this course, we&rsquo;ll cover everything you need to know and think about if you&rsquo;re planning to retire between the ages of 60 and 64; it&rsquo;s not exactly early retirement, but many people do continue to work past these ages. If you&rsquo;re considering retiring in your early 60s, this comprehensive course is for you.&nbsp;
<h3>What you&rsquo;ll learn in this class</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">What to do before you retire. There are some key things you need to do before you stop getting a paycheck.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Healthcare. You&rsquo;re close to Medicare eligibility, but not quite there yet. Find out what your healthcare options are.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Investments. Your savings are more important than ever now that you&rsquo;re seriously considering retirement. Do you have a firm grip on your money?&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Benefits. Some in your age group may be drawing Social Security benefits already, but it pays (literally) to wait!&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Taxes. Taxes are still a part of life, even in retirement. In fact, that&rsquo;s even more the case as you begin to tap into your investment accounts.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Checklist. Are you really ready to retire?&nbsp;</li>
</ul>

<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Xu JQ, Murphy SL, Kochanek KD, Arias E. &ldquo;Mortality in the United States, 2021.&rdquo; CDC.gov, 8 December 2022, <a href="https://www.cdc.gov/nchs/products/databriefs/db456.htm">https://www.cdc.gov/nchs/products/databriefs/db456.htm</a>. &nbsp;Accessed 29 November 2023.</li>
</ol>

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How much money you&rsquo;ll need is the greatest enigma about retirement, and something that&rsquo;s at the forefront of everyone&rsquo;s mind. But if your spending outweighs your retirement savings, you may run out of money in retirement - something Silvur wants you to avoid. By carefully planning your retirement strategy, you can retire in your early 60s as long as you stick to your spending budget.&nbsp;
While there&rsquo;s no magic number that works for everyone when it comes to retirement, it&rsquo;s helpful to plug your savings and investment information into the Silvur app to get your customized Retirement Score. This is a calculation that takes into account how much money you&rsquo;ve saved, along with factors like your age, when you hope to retire and when you&rsquo;re planning on drawing Social Security benefits (if you&rsquo;re eligible). Below is an example of what you can learn from Silvur&rsquo;s Retirement Score about your likelihood of having enough money to retire with.
Example
Remember Bob and Ellen from our 50-59 class? In this example they&rsquo;ve decided to wait until their early sixties to retire. Now, they both plan to retire at 60, and they&rsquo;ll be drawing Social Security starting at age 62. Together, they&rsquo;ve saved $500,000 in retirement accounts. But since they&rsquo;ll be retiring at 60, they&rsquo;ll be able to spend a little bit more compared to their counterparts who retired in their fifties.&nbsp;
Based on their $500,000 net worth, they&rsquo;ll be able to spend $4,000 a month while maintaining a Retirement Score of 100 years an 8 months--making their savings likely last beyond their years.
But if Bob and Ellen spent $5,000 a month, their Retirement Score will dramatically decrease to 84 years and 9 months. The $1,000 difference a month equates to an additional 16 years in savings.
Let&rsquo;s suppose Ellen and Bob built their net worth to $1,500,000, they will be able to spend up to $7,000 a month. Their Retirement Score will be beyond 97 years allowing them to pass an inheritance.&nbsp;
Below, you&rsquo;ll see that with their Social Security income and their savings, Bob and Ellen should be able to outlive their money as long as they spend wisely and don&rsquo;t allow their monthly spending to go above $4,000 if their net worth was $500,000 and more.&nbsp;
<h3><img src="https://cdn.buttercms.com/1zBLu3dTQdWG2IlgaeT9"></h3>
Note: We assume that the Retirement Score is calculated at age 55, retire at age 60, and elect Social Security at 64. Net worth is assumed split between savings and IRA accounts.
<h3>What You Can Do Now</h3>
If you&rsquo;re looking to retire anywhere between 60 to 64, plug your basic information into Silvur to obtain a Retirement Score. This will give you a good idea how long your savings will last in retirement, and whether you&rsquo;re on par to retire in your early to mid-sixties.&nbsp;&nbsp;

Advance planning is key when it comes to this big step in your life. Living without a paycheck isn&rsquo;t something to be taken lightly, and you want to make sure your retirement is as comfortable and stress-free as possible. That&rsquo;s why there are some steps you should take before you exit the workforce.&nbsp;
<h2>1. Commit to a Retirement Budget</h2>
In the year before you say your final goodbye to the full-time workforce, you&rsquo;ll need to nail down your retirement budget. It&rsquo;s safe to say that your financial situation will change once you&rsquo;re retired, and the sooner you&rsquo;re able to gain a clear picture of what that will look like, the better off you&rsquo;ll be. One easy way to budget in retirement is to come up with a total monthly spending amount similar to the example with Bob and Ellen in the lesson &ldquo;How Long Your Savings Will Last By Budget.&rdquo; Your Retirement Score will give you an idea of how long your savings will last you based on your monthly budget.
When creating your budget, don&rsquo;t forget to account for large expenses like healthcare, and smaller ones that can sneak up and bust your budget, like cost-of-living adjustments. It&rsquo;s always good to live below your means so you can build an extra cushion for unexpected expenses.&nbsp;
<h2>2. Maximize Contributions to Retirement Accounts</h2>
The money you save in these accounts is meant to last you the rest of your life. Let that sink in. Since there&rsquo;s no way to know how long you&rsquo;ll live (outside of averages, of course), you&rsquo;ll have to shoot high. One of the best ways to do that is to contribute the maximum amount to retirement accounts like your 401k and IRA.&nbsp;
Of course, there are yearly limits on how much you can contribute, but these are increased for people over 50. So by your early 60s, you could have many thousands of additional dollars to spend in retirement if you&rsquo;ve been taking advantage of these increased amounts since you turned 50.&nbsp;
<h2>3. Look into Long-term Care Insurance and Life Insurance</h2>
Just like healthcare (and death and taxes!), it seems insurance never goes away, even in retirement. And if you&rsquo;re in your early to mid-60s, it&rsquo;s not too late for you to purchase long-term care insurance and life insurance policies. Maybe you&rsquo;ll never need them, but they can certainly be helpful if the unexpected happens. Learn more about both of these types of insurance in the lesson &ldquo;<a href="/retirement-school/long-term-care" rel="follow">Long-Term Care</a>.&rdquo; 
<h2>4. Make Catch-Up Contributions</h2>
How much are catch-up contributions? For 401ks, people over the age of 50 can contribute an additional $7,500 above the yearly contribution limit of $23,000. And for IRAs, you can contribute an additional $1,000 above the yearly contribution limit of $7,000. That means if you max out your catch-up contributions for all 10 years from your 50s to 60s, you&rsquo;ll put away another $85,000 toward your nest egg. 
<h2>5. Refinance or Downsize Your Home</h2>
Will you be moving in retirement? Whether you&rsquo;re hoping for a smaller mortgage payment (or to avoid one at all!) or a warmer, more retirement-friendly climate, it&rsquo;s best to take this step before you start your retirement. It&rsquo;ll be easier for you to obtain a mortgage while you still have a paycheck. In addition, closing costs, taxes, moving expenses and other hidden fees often make purchasing a new home more expensive than it seems at the start.&nbsp;
<h2>6. Review Portfolio Allocation</h2>
One thing you may wonder about as you approach retirement is whether your money is invested properly. You&rsquo;ll want to ensure you have the right mix of aggressive and conservative investments, based on your individual situation. It&rsquo;s only natural to want to &ldquo;de-risk&rdquo; your portfolio as retirement approaches. But remember, if you&rsquo;ll be retiring in your early to mid-sixties, you&rsquo;ll still need to account for some amount of inflation in the future. You can offset this by keeping a small portion of your stocks in more aggressive investments. Then, the rest of your money can be held in a more conservative investment than you&rsquo;ve had in the past.&nbsp;
Before you decide what allocation is right for you, review your budget - or create one ASAP and start living off it - and see how it&rsquo;s working for you. Will you be relying heavily on money from your portfolio during retirement, or will you be largely comfortable without it? What other sources of income will you have in retirement like a pension, property rental, or dividends? Once you understand how much you need to rely on your portfolio to cover your spending, you can determine how much risk you want to take in your portfolio.&nbsp;
Let&rsquo;s say you need to rely on your portfolio to cover your expenses while in retirement. This means you should take fewer risks in your portfolio by buying more bonds instead of stocks. Typically, retirees who enter into retirement have a 60/40 bonds-to-stock ratio in their portfolios.&nbsp;
<h2>7. Fully Fund Your HSA</h2>
A well-funded HSA can be a huge help for anyone, but that&rsquo;s particularly the case if you&rsquo;re hoping to retire in the years before Medicare kicks in. All healthcare options for retirees who don&rsquo;t yet qualify for Medicare are expensive; there&rsquo;s no way around that (see the next lesson &ldquo;Healthcare Options for Retirement at 60 to 64&rdquo; for a breakdown of your options). But an HSA allows you to withdraw the money you&rsquo;ve saved to use on qualified medical expenses at any age. And once you turn 65, you can use your HSA funds for non-medical purposes, but the withdrawals will be subject to ordinary income taxes. Don&rsquo;t forget that your HSA can be invested, which can be another tax-free investment vehicle for your retirement.&nbsp;
<h2>8. Build an Emergency Fund</h2>
By your early to mid-sixties, you&rsquo;ve got several different options for liquid assets if you&rsquo;ve been saving in a few different investment accounts. You can now tap into your 401k without penalty, which wasn&rsquo;t the case if you retired before the age of 59 &frac12;. But if you don&rsquo;t want to do that, use these last few months or years of work to build a stash of liquid assets like cash that you can keep at the ready in the event of an emergency or other unexpected expense.&nbsp;

Whether you are married, single, divorced or widowed can impact your retirement in myriad ways. Consider how your marital status could affect your plans, as well as steps you can take to improve your situation regardless.
<h2>Married Couples</h2>
Married couples face advantages and disadvantages when it comes to retirement. With two people retiring together, you&rsquo;ll need twice as much cash to cover daily living expenses like food, utility bills and healthcare. Also, decisions you make in retirement as an individual in a marriage can adversely affect the other person.&nbsp;
However, having another person to lean on can be immensely helpful since you can make decisions together and take care of one another. Married couples can also choose to have one or both partners continue working part-time to increase retirement income or delay withdrawals from investment accounts.
In addition, there are other strategies for married couples when it comes to Social Security and Medicare. For example, Social Security election age is important especially if one relies on the other&rsquo;s benefits. Typically, females live longer than males so if one elects too early, this might end up hurting the other spouse&rsquo;s spending in the future. You can learn more strategies in our class &ldquo;<a href="/retirement-school/social-security-for-married-couples" rel="follow noopener" target="_blank">Social Security Benefits for Married Couples.</a>&rdquo;&nbsp;
For spouses who have a large age gap, you can potentially save money on healthcare costs by enrolling into your younger working spouse&rsquo;s healthcare plan even if you&rsquo;re eligible for Medicare. But there are rules to know if you plan to delay your enrollment which you can learn more in our &ldquo;<a href="/retirement-school/medicare-101" rel="follow noopener" target="_blank">Medicare 101</a>&rdquo; class. 
<h2>Singles</h2>
Being single in retirement can be immensely beneficial in some ways. For example, you can opt for a smaller living space, and you only need to have enough assets to pay for monthly expenses for yourself. However, being single in retirement can also mean paying for regular living expenses entirely on your own, and having to make an array of important decisions all by yourself.&nbsp;
To best assess your finances and Social Security benefits, you need to factor in your longevity. If you plan to live a long life, it might not be wise to collect benefits early at a reduced rate. It might make more sense to build up your savings to carry you over while you delay your Social Security election age to increase your benefits. For a more detailed explanation on when to elect benefits, you can read our class &ldquo;<a href="/retirement-school/social-security-benefits-for-singles" rel="follow noopener" target="_blank">Social Security Benefits for Singles.</a>&rdquo; 
One great option to lessen the burden of retirement is to find a roommate you trust and get along with. It&rsquo;s a great way to help each other out, reduce bills like food and utilities, and have company when you want it as well.&nbsp;
<h2>Divorced or Widowed&nbsp;</h2>
Being divorced or widowed can leave you in a similar position in retirement as if you were initially single. However, you're more likely to have access to remaining benefits such as a pension or spousal Social Security benefits. Make sure you have a plan to maximize any spousal benefits currently being paid out to you, as well as those you expect to receive in the future. If you&rsquo;re a widow or widower, you can draw survivor benefits as early as age sixty without affecting your own benefits, and while you&rsquo;re still gainfully employed. This is key, since it allows you to keep working and building both your nest egg and your own Social Security benefits which you can learn more about in our class &ldquo;<a href="/retirement-school/social-security-benefits-for-widows" rel="follow noopener" target="_blank">Social Security Benefits for Widow(er)s.</a>&rdquo;&nbsp;
Benefits work a bit differently for divorced spouses, though. If you were married for more than 10 years and you&rsquo;re now divorced, you&rsquo;re entitled to 50% of your ex-spouse&rsquo;s Social Security benefit amount. If your own Social Security benefits are higher, though, you&rsquo;ll automatically receive that higher amount and your ex-spouse&rsquo;s benefits won&rsquo;t come into play. Do keep in mind though, if you are receiving spousal benefits, you can only get the maximum benefit amount when you hit Full Retirement Age. Filing before that will reduce the benefits you&rsquo;re entitled to. Understand what the rules are to maximize your ex-spousal benefits at &ldquo;<a href="/retirement-school/divorced-social-security-benefits" rel="follow noopener" target="_blank">Social Security Benefits for Divorced Couples.</a>&rdquo; 
Finally, for widowed or divorced, remember that these are both considered qualifying life events for the purpose of healthcare enrollment. So be sure to use that to your advantage if you still need to sign up.&nbsp;

You may choose to retire between 60 and 64, but your healthcare costs sure don&rsquo;t! In fact, you can expect to spend more on healthcare in retirement than any other time in your life. A 65-year-old couple retiring this year can expect to spend $315,000 in healthcare and medical expenses throughout retirement. For single retirees, the 2023 estimate is $157,000.1
That equates to more than $12,600 per year for the rest of your life. And since Medicare doesn&rsquo;t kick in for another one to five years, you&rsquo;ll definitely need coverage. We&rsquo;ll discuss each below in order to help you make the best decision for you. And if you&rsquo;re hoping to dive even deeper into healthcare options before Medicare in retirement, visit our <a href="/retirement-school/category/healthcare" rel="follow noopener" target="_blank">Early Retirement Healthcare</a> classes. 
<h2>Get Covered by Your Spouse&rsquo;s Insurance</h2>
If your spouse will be working longer than you, the easiest and most cost-efficient way to get insurance in early retirement is to be added to their company insurance plan.&nbsp;&nbsp;
<h2>Employer-Sponsored Health Insurance</h2>
If your company does offer insurance as a benefit for retirees, it&rsquo;s a good idea to take advantage of it, even if it&rsquo;s a high-deductible policy. Then, you can set up a Health Savings Account to cover future expenses if the insurance is HSA approved. There are three tax advantages of having an HSA: contributions are tax-deductible, interest earned is tax-free, and withdrawals are tax-free on qualified medical purchases. You can continue to contribute to your HSA until you go on Medicare in a few years, or receive Social Security, whichever occurs first.&nbsp;
Only a small minority of employers still offer health benefits to their retirees - only around 30% -&nbsp; and they&rsquo;re often large companies. But if you happen to qualify for one of these plans, it&rsquo;s likely to be one of the more cost-effective plans to choose from before Medicare. An added bonus? It&rsquo;s probably insurance you&rsquo;re already holding so you may not be forced to switch providers.2&nbsp;
<h2>COBRA</h2>
COBRA allows you to stay with your employer&rsquo;s plan for 18 months in the case of a termination or reduction in hours. You&rsquo;re getting closer to Medicare as you approach the latter half of this age bracket, but you&rsquo;re not quite there yet. That means COBRA may not cover the entire gap between ending work and becoming eligible for Medicare, but it will allow you to continue your current health coverage for at least a bit longer. If you&rsquo;re lucky and plan to be 65 within 18 months, COBRA can bridge you over to you qualify for Medicare. Although this type of continued coverage can be pricey - you&rsquo;ll be paying both your own and your company&rsquo;s portions now - but it can still be a better option than obtaining an entirely new policy. Estimates indicate the average annual COBRA premium for an individual (regardless of age) is $8,435 and for a family, the premium is around $23,968.3 
<h2>Short-Term Health Insurance</h2>
Another way to obtain health insurance for just a few years is to opt for a short-term health plan. You should only consider a plan like this if you are in good health, have no chronic medical conditions, rarely see a doctor and take few to no prescriptions. That&rsquo;s because coverage is minimal, and expenses above basic medical needs can add up quickly. In addition, you can be denied coverage for pre-existing medical conditions, since short-term health plans aren&rsquo;t covered under the Affordable Care Act (which no longer disqualifies people from coverage based on chronic health conditions).&nbsp;
While prices vary widely for short-term medical plans, most adults in their 50s and early 60s can expect to pay between $260 and $657&nbsp;per month. While that&rsquo;s a reasonable payment for health coverage, do keep in mind that these types of plans often come with very high deductibles; $5,000 to $10,000 or more. If you&rsquo;ve got a well-funded HSA, you could use some of the money you&rsquo;ve saved to assuage the cost of the deductible.4
 Short-term plans provide coverage up to one year, and can be renewed or canceled at any time.&nbsp;
<h2>Affordable Care Act (Obamacare)</h2>
The Affordable Care Act provides options for health care, but be prepared&mdash;the rates are not always so affordable. ACA premiums can vary from person to person but age is a top contributing factor.&nbsp; If you plan to retire between the ages of 60-64, the average monthly premium you can expect to pay for individual coverage is $1,163, without subsidies.5&nbsp;
Upon applying for ACA coverage, you&rsquo;ll need to provide your annual income amount to determine whether you&rsquo;ll qualify for premium credits. Premium credits can drastically reduce the amount you spend on healthcare in a month, but if you underestimate your income, you could get slapped with a hefty tax bill at the end of the year. That&rsquo;s what happened to Rhonda H.
<h3>Rhonda&rsquo;s Retirement Story</h3>
Rhonda H. promised her husband she&rsquo;d retire with him when she reached 65 or 66. However, after working 16 &frac12; years at her current company, she was forced to retire at 61 when a new management team took over. That left the couple without four to five years of income they had planned on having.
Since both she and her husband were insured under her company&rsquo;s plan, health insurance was a big concern. COBRA premiums were out of sight, as were those from private insurance companies.
&ldquo;Then an insurance agent quoted me a price of $495 a month for ACA insurance for both of us,&rdquo; says Rhonda. It seemed too good to be true, and it was. A year later, when filing her tax return, Rhonda was informed that she owed $9900 in penalties and back premiums for the ACA policy.
After checking with a tax attorney, Rhonda learned that the unscrupulous agent had entered lower income levels so he could quote a lower cost premium and make a sale.&nbsp;

As Rhonda&rsquo;s story shows, it&rsquo;s always better to overestimate than underestimate your income when filing for ACA insurance, and ensure you don&rsquo;t claim credits you&rsquo;re not eligible for. Advance premium credits, which lower premium rates, are based on income and taxable household size. Penalties apply if you underestimate your income and pay a lower rate.&nbsp;
ACA healthcare plans can be obtained during the annual enrollment process or when you have a qualifying life event (like a death or divorce).&nbsp;
If you&rsquo;re up in the air about how to manage healthcare in the early years of your retirement, visit our Healthcare in Early Retirement course to learn more about the options available to you, and which could be the best choice given your situation.

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Fidelity Releases 2023 Retiree Health Care Cost Estimate: For The First Time In Nearly A Decade, Retirees See Relief As Estimate Stays Flat Year-Over-Year.&rdquo; Fidelity Investments, 21 June 2023, <a href="https://preview.thenewsmarket.com/Previews/FINP/DocumentAssets/645024.pdf">https://preview.thenewsmarket.com/Previews/FINP/DocumentAssets/645024.pdf</a>. Accessed 18 October 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2023 Employer Health Benefits Survey.&rdquo;kff.org, 18 October 2023,&nbsp;<a href="https://www.kff.org/report-section/ehbs-2023-section-1-cost-of-health-insurance/">https://www.kff.org/report-section/ehbs-2023-section-1-cost-of-health-insurance/</a>. Accessed 14 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Ilbd.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Short-Term Health Insurance.&rdquo; eHealth,&nbsp;<a href="https://www.ehealthinsurance.com/short-term-health-insurance">https://www.ehealthinsurance.com/short-term-health-insurance</a>. Accessed 29 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2024 QHP landscape data.&rdquo; healthcare.gov,&nbsp;<a href="https://www.healthcare.gov/health-plan-information-2024/">https://www.healthcare.gov/health-plan-information-2024/</a>. Accessed 13 November 2023.</li>
</ol>

Insurance is meant to protect you financially if a catastrophic event were to occur. And that&rsquo;s exactly what you need in retirement: financial protection. Here are two types of insurance to consider for this period of your life. And your early to mid-sixties isn&rsquo;t too late to start either of these.&nbsp;
<h2>Long-Term Care Insurance</h2>
Retiring in your early sixties should allow you many years to have fun, travel and learn new hobbies. But the fact of the matter is, there&rsquo;s a chance you&rsquo;ll need a nursing home or assisted living facility at some point later in your retirement. It&rsquo;s understandable to not want to think about this, but now is the time to figure out a plan for how you&rsquo;ll pay for that.&nbsp;
Estimates indicate that the average 2024 yearly cost to stay at a nursing home are upwards of $103,700. Assisted living facilities aren&rsquo;t much cheaper, clocking in around $59,007.1 Luckily, long-term care insurance can help offset these high costs, covering things like in-home care, palliative, hospice care, and Alzheimer&rsquo;s assistance as well.
If that sounds too good to be true, that&rsquo;s partly the case. The cost of long-term care insurance is quite high for a low policy without any extra coverage. Estimates for the average 2023 annual premium for 60-year-olds are $1,200 for a male and $1,960 for a female. And a couple, both age 60, can expect an annual premium of $2,550. And that&rsquo;s just for a policy that would pay $165,000 without an inflation rider for long-term care expenses.2 For more coverage (which would likely be necessary), you can expect a much higher monthly premium&mdash;almost double. Additionally, if you&rsquo;re hoping to have a policy that protects against inflation, you&rsquo;ll need to include an inflation rider. That will increase your premiums quite a bit as well. While these policies can be pricey, it&rsquo;s a short-term sacrifice to ensure you&rsquo;re able to get the best care possible in the latter part of your retirement.
<img src="https://cdn.buttercms.com/6TSCG1ahSk2unBgUnDRz">
<h2>Life Insurance</h2>
Do you need life insurance in retirement? It&rsquo;s a common question with a relatively simple answer: if there&rsquo;s someone who depends on you for their welfare, like a disabled adult child or a younger spouse, you should have life insurance. And the decision to obtain life insurance shouldn&rsquo;t be taken lightly, since you&rsquo;ll pay more for a policy if you initiate it in your early 60s. The two main types of life insurance policies available to you are term life and whole life. Although both offer you peace of mind, one has a cheaper premium with a definite end date while the other can be used as another investment vehicle for the rest of your life at a higher monthly premium.
<h3>Whole Life Insurance</h3>
A whole life plan is a life insurance plan that lasts for your whole life. There&rsquo;s no need to worry about keeping track of when your plan ends; it&rsquo;s set up to end when you pass. If you opt for a whole life insurance plan, you&rsquo;ll choose between a permanent plan and a universal plan.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Whole Life Permanent. With a permanent plan, your premiums stay the same each month (or year if you choose to pay your premiums annually).</li>
<li style="font-weight: 400;" aria-level="1">Whole Life Universal. If you have a universal plan, you&rsquo;ll enjoy flexible premiums that allow you to pay less or more depending on your financial situation. This type of plan requires a bit of extra discipline though; paying lower premiums for a long time sets you up for a larger bill later on, which isn&rsquo;t exactly beneficial as you approach retirement.</li>
</ul>
Whole life insurance is a lot more expensive than a term life policy because there are additional benefits that can be treated as another retirement savings vehicle. For example, there&rsquo;s a cash value component that grows tax-free over time. So if you&rsquo;ve already maxed out your traditional retirement accounts like 401(k) or IRA for the year, your whole life policy can be treated as another savings account. You can withdraw or borrow against your cash value but if you don&rsquo;t repay the money, your death benefit reduces. Unlike term life, there&rsquo;s a guaranteed death benefit for your beneficiaries and some policies may offer dividends.&nbsp;
If you&rsquo;re looking to use a whole life policy for extra cash cushion, try a smaller policy. You&rsquo;ll still be able to get all whole life insurance benefits at a lower premium. Policies can range anywhere from $10,000 to millions.3&nbsp;
<img src="https://cdn.buttercms.com/XQL0yQVYQHKVPGMOGYTM">
<h3>Term Life Insurance</h3>
Unlike whole life, term life insurance lasts for a finite amount of time. Most policies last 10 or 20 years, after which you have to sign up for a new policy or go without coverage. And if you purchase a term life policy in your 60s, the terms available are usually only 10 or 20 years. While term life is less expensive to purchase than whole life, it doesn&rsquo;t have the whole life benefits like cash value accumulation, dividends, and guaranteed death benefit. If your term life policy expires, you (and your family) don&rsquo;t have access to any benefits. Keep in mind that starting a new policy becomes more expensive as you age, which is a drawback of term life insurance.4
<img src="https://cdn.buttercms.com/aZ8EuHzZRA2XIdiP2QXm">
For most, life insurance is necessary to help decrease the financial burden on your family as you pass. It provides your beneficiaries a lump sum to pay for final arrangements, any debt you&rsquo;ve racked up (think loans or hospital bills), peace of mind and financial security.

<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Cost of Long Term Care by State: Cost of Care Report.&rdquo; Genworth, <a href="https://www.genworth.com/aging-and-you/finances/cost-of-care.html">www.genworth.com/aging-and-you/finances/cost-of-care.html</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2023 Long-Term Care Insurance Information.&rdquo; American Association for Long-Term Care Insurance,&nbsp;<a href="https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php">https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Bibey, Chris. &ldquo;How Much Does Whole Life Insurance Costs? Rates &amp; Charts.&rdquo; Top Whole Life, 24 August 2022,&nbsp;<a href="https://topwholelife.com/whole-life-insurance-faqs-much-whole-life-insurance-cost">https://topwholelife.com/whole-life-insurance-faqs-much-whole-life-insurance-cost</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Term Life Insurance Quotes.&rdquo; Quotacy,&nbsp;<a href="https://www.quotacy.com/term-life-insurance-quotes">https://www.quotacy.com/term-life-insurance-quotes</a>. Accessed 30 November 2023.</li>
</ol>

If you&rsquo;ve had a long-time goal of retiring in your early sixties before your government benefits kick in, you&rsquo;re probably like 63% of all workers in the workplace who participate in a retirement plan, like a 401(k), an IRA and a pension plan.1 In this lesson, we&rsquo;ll take a deeper look at the rules and regulations you&rsquo;ll face when it comes to withdrawing money from your investment accounts. Here&rsquo;s what you need to know as you approach retirement.
<h2>Average Retirement Savings for 60- to 64-Year-Olds</h2>
The first thing on your mind if you&rsquo;re hoping to retire at 60 is likely money. And rightfully so. According to the 2019 Federal Reserve SCF data, the average retirement savings in the U.S. for ages 60 to 64 is $537,560. The median retirement savings for that same age group is $185,000. As you can see from our example above, these numbers aren&rsquo;t quite high enough to support a retirement that could still span two to two and a half decades. At these savings levels, Bob and Ellen would likely run out of money far before they stop needing it, even with their Social Security income. But, there are other factors, like equity in your home, the ability to cut back and live on less, and inheritance that could positively impact your nest egg.2 &nbsp;
Whether your savings are in line with these averages or much higher or lower, establishing a budget is a crucial first step to take before retiring. Start closely tracking your spending (aim to do this for a few months, but the longer the better!) and get familiar with where your money is going. Then, decide whether and where you can cut back if you need to. Remember to consider not only income but also things like taxes (more on that later), healthcare premiums and extras that can pop up from time to time, like car repairs or home maintenance fees.&nbsp;
<h2>401(k)</h2>
The average 401(k) balance for people in their sixties is $182,100.3 But the reality is that you&rsquo;ll likely need much more than that if you&rsquo;re going to retire between 60 and 64 and draw income for the rest of your life. The exact amount varies widely based on your individual needs.&nbsp;
If you&rsquo;re holding on to a robust 401(k) with more than enough money to sustain your plans for an early retirement, you&rsquo;ll be glad to know that at age 60, you&rsquo;re finally able to make penalty-free withdrawals from your 401(k). That privilege begins at age 59 &frac12;, and helps you avoid costly tax penalties associated with an early withdrawal from your account.&nbsp;&nbsp;
If you&rsquo;ve entered your sixties feeling comfortable about the amount you have in your 401(k), give yourself a pat on the back. If, however, they fall short of these amounts, it may be to your advantage to work for a few more years in order to take advantage of catch-up contributions. The total allowable catch-up contribution is $7,500 per year above and beyond the $23,000 limit for 2024. That means starting at age 50, you can contribute a total of $30,500 to your 401(k).&nbsp;
So hanging on for just a few more years could potentially increase the balance of your 401(k) to a number that allows you to live comfortably on your investment for the rest of your life. And if you&rsquo;re reading this several years before you turn 60, this is definitely something to include in your retirement plan to leave the workforce in your early sixties. Ten to fifteen years of increased contributions are sure to help boost your 401(k) balance. 
<h2>IRA</h2>
Hopefully, you&rsquo;ve saved additional money in an IRA if you&rsquo;ve had a goal of retiring early at the age of 60. An IRA, whether Traditional or Roth, is an invaluable tool when it comes to boosting your retirement portfolio. Despite the fact that IRAs are and have always been subject to a contribution maximum, the compounding interest you could grow through decades of saving can become an invaluable asset for retirement.
When it comes to consequences for early withdrawal, your IRA functions similarly to your 401(k). By the time you reach age 60 (59 &frac12;&nbsp; to be exact), you can tap into your savings without having to worry about a penalty for early withdrawal. However, keep in mind that the money you pull from your Traditional IRA will be considered taxable income.&nbsp;
If you&rsquo;re 60 or 61, you can contribute a maximum of $7,000 to your IRA. In another year, at 62, you can increase your contribution to $8,000. And, thanks to the SECURE Act of 2019, you can continue contributing to either IRA past the age of 72, but it must be from earned income only&mdash;not pensions, dividends, etc. Note: A spouse can make IRA contributions into their IRA account as well as their retired spouse&rsquo;s IRA account as long as the total contributions do not exceed their income.4
Despite the fact that IRAs are and have always been subject to a contribution maximum, the compounding interest you could grow through decades of saving can become an invaluable asset for retirement.
<h2>Roth Conversions</h2>
Do you know what your future tax rate will be once you retire? If you think it might stay the same or increase, then you should look into converting your investments into a Roth IRA to save you on taxes in your retirement. As a reminder, you&rsquo;ll be subject to Required Minimum Distributions (RMDs) once you hit 73 (or 72 depending on your birth year) and by converting qualified RMD accounts like IRAs and 401(k)s into a Roth IRA, you&rsquo;ll not be subject to RMDs and have tax-free withdrawals.
There&rsquo;s no limit on how much money you can convert to a Roth IRA but it will increase your taxable income which could bump you into a higher tax bracket.&nbsp;
Here&rsquo;s a tip: consider spreading your conversions over time if your income stays relatively the same year over year. This will ensure you don&rsquo;t get a big tax bill by converting all at once.
<h2>Pension</h2>
If you earned a pension during your working years, it&rsquo;s yet another tool that can get you closer to your goal of retiring in your early 60s. While state pensions don&rsquo;t start paying out until you reach age 66, you can withdraw money from most workplace or personal pensions when you turn 55.&nbsp;
You can withdraw money from your pension as a lump sum or a monthly payout. Here are some pros and cons of each withdrawal method:6
<h3>Lump Sum</h3>
<img src="https://cdn.buttercms.com/8UwyLvqzTW7rvWfjDc5l" alt="undefined">
<h3>Monthly Payment</h3>
<img src="https://cdn.buttercms.com/Ds7YkAkUTnulVLvTRyXm" alt="undefined">
One way to support an early retirement is to take the money as a lump sum payout and invest it in an ETF or mutual fund to let it continue to grow. This strategy is best if you have experience managing your own investments.&nbsp;&nbsp;
&nbsp;
<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;National Compensation Survey: Employee Benefits in the United States, March 2022.&rdquo; U.S. Bureau of Labor Statistics, 13 April 2023, <a href="https://www.bls.gov/ebs/publications/september-2022-landing-page-employee-benefits-in-the-united-states-march-2022.htm">https://www.bls.gov/ebs/publications/september-2022-landing-page-employee-benefits-in-the-united-states-march-2022.htm</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Benson, Alana. &ldquo;What Is the Average Retirement Savings by Age?&rdquo; NerdWallet, 24 October 2023,&nbsp;<a href="https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more">https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Milena. &ldquo;Average 401k Balance by Age - Stats &amp; FAQs.&rdquo; BalancingEverything, 3 March 2023,&nbsp;<a href="https://balancingeverything.com/average-401k-balance-by-age">https://balancingeverything.com/average-401k-balance-by-age</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Pension lump sum considerations.&rdquo; StateFarm, 4 May 2023,&nbsp;<a href="https://www.statefarm.com/simple-insights/retirement/pension-questions-should-i-take-a-lump-sum-offer">https://www.statefarm.com/simple-insights/retirement/pension-questions-should-i-take-a-lump-sum-offer</a>. Accessed 1 December 2023.</li>
</ol>

At age 62, you&rsquo;re first eligible to begin receiving your Social Security benefits. But we advise you to keep in mind that the earlier you start benefits, the less you&rsquo;ll receive each month. And it&rsquo;s a substantial reduction; your benefits at age 62 are as much as 30% lower than those you&rsquo;d receive once you reach your full retirement age, which for most retirees is somewhere between 66 and 67.&nbsp;
Once you reach age 62, if you are married or were married, you may be eligible to apply for spousal Social Security benefits that equal up to 50% of benefits received by your spouse or ex-spouse. The exact amount depends on your age, work history and marital status.
If your spouse dies, you may be eligible to receive a survivor&rsquo;s benefit of 100% of the benefits your spouse was receiving.
To learn more about the best election strategy for you based on your marital status, visit our Retirement School course, &ldquo;<a href="/retirement-school/social-security-101" rel="follow">Social Security 101.</a>&rdquo; Then, visit our Social Security calculator for a personalized recommendation on what age is best for you to elect your Social Security benefits.

Any retirement budget should include taxes, since you&rsquo;ll still be on the hook to pay some taxes even after you exit the workforce. Here&rsquo;s what you need to know about taxes in retirement.&nbsp;
<h2>Taxes on Social Security Benefits</h2>
When putting together your retirement strategy that involves leaving the workforce in your early 60s, don&rsquo;t forget to account for taxes on your Social Security benefits. The federal tax rate on Social Security benefits is based on your combined income. You can determine your combined income by adding the following: Your adjusted gross income + nontaxable interest + &frac12; of your Social Security Benefits.
If your combined income is:
<ul>
<li style="font-weight: 400;" aria-level="1">$34,001 or more ($44,001 or more if you&rsquo;re married filing jointly), up to 85% of your benefits will be subject to federal tax. Between $25,000 to $34,000 (or between $32,000 and $44,000 as a joint filer), you&rsquo;ll be taxed on 50% of your benefits.&nbsp;</li>
</ul>
And if you live in any of the 10 states listed below, you could also be subject to state-level taxes on your benefits. The following states are considered not-so-friendly to retirees from a tax perspective: Colorado, Connecticut, Kansas, Minnesota, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont.1&nbsp;
<h2>Taxes Based on Location</h2>
Thinking of relocating during or before retirement? Be sure to factor taxes into your decision. After all, your new location may have a big factor on your taxes. Consider differences in cost of living and healthcare expenses, as well as federal and state taxes. And if you plan to leave an estate, that money could also be taxed federally and at the state level if you&rsquo;re residing in a state that allows this. And that&rsquo;s the same if you receive an inheritance as well.&nbsp;
To learn more, check out our class, &ldquo;<a href="/retirement-school/how-location-impacts-taxes" rel="follow noopener" target="_blank">How Location Impact Taxes.</a>&rdquo;&nbsp;There, you can dive deeper into each state&rsquo;s individual tax situation as well as any special tax deductions for older Americans. Then, go to our Cost of Living calculator to compare different tax rates and see how moving impacts your Retirement Score.
<h2>Taxes on Investment Accounts</h2>
Once you&rsquo;re finally retired, you&rsquo;ll likely turn to those tax-deferred retirement accounts you&rsquo;ve been working so hard to beef up over the years. Once you do, remember that you&rsquo;ll be taxed on any withdrawals you make. The amount will count as ordinary income in the year it&rsquo;s withdrawn, though at this age, there are no other penalties to worry about.&nbsp;
These tax-deferred accounts, like a traditional 401(k) or 403(b), SEP, or traditional IRA, are subject to Required Minimum Distributions (RMDs), which are yearly amounts you&rsquo;re forced to take once you turn 73 (or 72 if you were born before December 31, 1950). RMDs are also treated as taxable income.
If your money is sitting in a Roth account, it can continue to grow untouched, and thanks to the SECURE Act, you can even continue contributing to it. But don&rsquo;t forget to assign a beneficiary to your Roth IRA, your beneficiary can inherit 10 years of tax-free distributions.
<h2>Tax Strategies to Help You Save Money</h2>
Yes, taxes are definitely part of retirement. And one thing you may not have considered is the order in which you&rsquo;ll start drawing down your retirement accounts. But chances are you&rsquo;ve got money in both taxable and non-taxable accounts, so you can actually minimize the impact to your taxes by putting together a savvy withdrawal strategy.&nbsp;
How do you know which withdrawal strategy to employ? It depends mostly on the goals you have. Below, we&rsquo;ve taken an excerpt from our Taxes in Retirement course as a reference. Here, you&rsquo;ll be introduced to three popular methods of withdrawal sequencing, depending on what your goals are.
Taxable First, then Tax-Deferred
<ul>
<li style="font-weight: 400;" aria-level="1">Withdraw from taxable accounts first (Social Security, annuities, other forms of earned income)</li>
<li style="font-weight: 400;" aria-level="1">Then start to draw down tax-deferred accounts (401(k)s, traditional IRAs, etc.)</li>
<li style="font-weight: 400;" aria-level="1">Leave the tax-exempt accounts (Roth IRA or Roth 401(k)) for last</li>
</ul>
Doing this allows you to potentially benefit from a lower tax rate and prioritizes leaving an inheritance for your heirs. Here, accounts with RMDs are tapped early on.
Taxable First, then Tax-Exempt:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Draw down taxable accounts first, like the first method,&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Then draw down the tax-exempt accounts (your Roth accounts),&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Finally, start drawing on the tax-deferred accounts (401(k)s, etc.).&nbsp;</li>
</ul>
This method reduces your tax bill throughout retirement and can make sense if you anticipate a lower tax rate in the future when you start drawing from the tax-deferred accounts since those withdrawals will be counted as income.&nbsp;
Tax Bracket Management:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Start with your tax-deferred accounts (e.g., IRA &amp; 401K accounts) first, but only up to a specific tax bracket (e.g. 12%, 22%, etc),</li>
<li style="font-weight: 400;" aria-level="1">Then withdraw from taxable accounts,</li>
<li style="font-weight: 400;" aria-level="1">Leave tax-exempt funds for last.&nbsp;</li>
</ul>
This method prioritizes passing your estate to your heirs and may be a good strategy if you expect a higher tax rate in the future. However, staying within a preferred tax bracket requires a bit of tax knowledge.
<h2>Taxes on Inherited Accounts</h2>
You may have inherited accounts from your parents or relatives - it&rsquo;s a great way to add to your nest egg. But there are some tax considerations that come along with it. Typically, any inherited accounts are still subject to RMDs and must be distributed within a 10-year period. These inherited accounts, outside of Roths, count as taxable income and can bump you into a new tax bracket. And depending on where you live, you may incur state taxes, too. If you don&rsquo;t want to deal with the taxes and responsibilities of real property or creditors, you have an option to disclaim an inheritance. To understand all the tax liabilities and rules that come with an inheritance, go to our course &ldquo;<a href="/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement</a>&rdquo; to get a deeper understanding.

<h4>SOURCES</h4>
<ol>
<li>Washington, Katelyn, &ldquo;States That Tax Social Security Benefits.&rdquo; Kiplinger, 5 September 2023.&nbsp;<a href="https://www.kiplinger.com/retirement/social-security/603803/states-that-tax-social-security-benefits">https://www.kiplinger.com/retirement/social-security/603803/states-that-tax-social-security-benefits</a>. Accessed 4 December 2023.</li>
</ol>

Just because you&rsquo;re retiring doesn&rsquo;t mean you have to stop making money altogether. Today, there&rsquo;s a way to make money doing just about anything, which can make it that much easier to retire regardless of your age. Here are some ideas to consider if you&rsquo;re hoping to set up some income streams, no matter how small or large, to supplement your retirement income.&nbsp;
<h2>1. Get a Side Job</h2>
Working after retirement keeps your mind active and sharp, boosts your social life and provides extra income. If you left your previous employer on good terms, consider inquiring about reducing your hours to part-time. Or, try your hand at something new. You probably won&rsquo;t be the oldest person on the job. The Bureau of Labor Statistics predicts that 30% of all 65 to 74-year-olds will be working in 2026.1 Once you begin receiving Social Security benefits, make sure to check on earnings limits.&nbsp;
Something to think about: 70% of our customers plan to work part-time in retirement. See how adding part-time work can increase your Retirement Score.
<h2>2. Sell Assets</h2>
Declutter your house and pocket some cash in the process by selling your stuff at a garage sale or online through Nextdoor, Poshmark, Craig&rsquo;s List or eBay.
<h2>3. Move to a Retiree-Friendly Area</h2>
While interest rates are low and housing markets are hot, you may want to relocate to an area with a lower cost of living. Florida and Texas are two retirement-friendly states where you can get more house for the money and save on taxes, too. For example, moving from NYC to Florida can add 12 years to your Retirement Score and allow you to say goodbye to income taxes and high cost of living.&nbsp;
<h2>4. Ladder Money Markets and CDs</h2>
Staggering maturity dates for Money Market accounts or CDs (3 months, 6 months, 9 months, 12 months, etc.) makes your investments more readily available while earning higher rates of interest on longer term investments. Laddering these accounts also protects you from investing too much money at too low a rate for too long a time.2
<h2>5. Rent Part of Your Home</h2>
If you have a spare bedroom or guest house, consider renting it for extra income. Or perhaps you could rent storage space in your garage, or offer to park a boat or an RV on your property for extra cash. Just make sure to check out tax ramifications and HOA guidelines first.
<h2>6. Consider Home Equity</h2>
Your home is not only your castle; sometimes it can be your cash cow. Leverage the equity in your house. Home equity loans, reverse mortgages and even the outright sale of your home can provide the extra cash you need. Stretch those dollars even more by downsizing or moving to a retirement-friendly state where you&rsquo;ll get more house for your money.&nbsp;
<h2>7. Cut Down on Non-Essential Expenses</h2>
Once you start looking for ways to save money, you&rsquo;ll realize how much money you&rsquo;ve wasted over the years. To cut back on your budget: cancel your landline phone and use only your smartphone. Stream your favorite TV programs and say good-bye to outlandish cable TV bills. Prepare home-cooked meals instead of eating out. Become a one-car family again and save on insurance, maintenance, fuel and tires. Increase your insurance deductibles. Rent pricey yard equipment like pressure washers. Install a smart thermostat to regulate house temperature. Order 90-day prescriptions to save on drug costs.&nbsp;
<h2>8. Volunteer</h2>
You can&rsquo;t put a price on helping others&mdash;or compute the good that comes from volunteering. It boosts self-esteem, makes the world a better place and may even lead to a part-time job. Dorothy, a court-appointed special advocate (CASA) volunteer, was eventually hired by the local Boys and Girls Club. Leslie&rsquo;s job as an activities coordinator for a senior citizen&rsquo;s home was a direct result of her years volunteering at their weekly bingo games. Pay it forward and you just may get a payback, too.

<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Labor Force Participation Rate for Workers Age 75 and Older Projected to be Over 10 Percent by 2026.&rdquo; Bureau of Labor Statistics, 29 May 2019, <a href="https://www.bls.gov/opub/ted/2019/labor-force-participation-rate-for-workers-age-75-and-older-projected-to-be-over-10-percent-by-2026.htm">https://www.bls.gov/opub/ted/2019/labor-force-participation-rate-for-workers-age-75-and-older-projected-to-be-over-10-percent-by-2026.htm</a>. Accessed 30 November 2023.</li>
<li style="font-weight: 400;" aria-level="1">Gibbs, Karen. &ldquo;How a CD Laddering Strategy Can Elevate Your Savings.&rdquo; Life and Money by Citi,10 October 2019,&nbsp;<a href="https://www.lifeandmoney.citi.com/money/savings/cd-ladder-strategy-for-high-interest-saving">https://www.lifeandmoney.citi.com/money/savings/cd-ladder-strategy-for-high-interest-saving</a>. Accessed 30 November 2023.</li>
</ol>

Are you ready for this exciting next chapter of your life? In this lesson, you&rsquo;ll meet a real-life retiree to give you a better idea of your readiness. Here&rsquo;s Harry&rsquo;s story - he&rsquo;s a retiree who successfully exited the workforce at 60 along with his wife.&nbsp;
<h2>Retirement at 60 to 64: A Real-Life Story</h2>
Harry B. had just turned 60 when he was offered a retirement package from his company. As attractive as retirement sounded, he and his wife weren&rsquo;t sure their financial situation could support it.
They sat down and reviewed a list of their expenses and assets, and weighed that information against their retirement dreams. &ldquo;Our vision for retirement meant boating and fishing, frequent cruises, vacations and no financial worries.&rdquo;
Harry weighed the buy-out options his company offered him&mdash;one lump sum or monthly payments for life. Choosing one lump sum, the couple invested it in a portfolio with a projected 5-6% yield. Even with investments, 401(k)s, IRAs, stocks, his wife&rsquo;s pension, equity in their house and fairly low debt, they fell short of what they needed to retire and maintain their current lifestyle. So they chose to move to an area with lower cost of living and cut out excess spending.&nbsp;
&ldquo;We either had to bring in more money or cut expenses&mdash;or both,&rdquo; says Harry. Taking advantage of the housing boom in Austin, Texas, they sold their house for a nice profit and relocated to Florida where they got more house for the money, paid lower taxes and lived on the water.&nbsp;
To cut spending, they sold one of their two cars, cancelled their landline phone, opted for streaming instead of pricey cable TV, shopped around for the best rates for car and home insurance and cell phone plans, kept the company health insurance (the increased premium still beat the competition in the private market), and pretty much eliminated frivolous spending.&nbsp;
That brought them to the magic number they needed. Retired for 11 years, they are living proof that it&rsquo;s possible to retire with less than the optimal amount of money if you&rsquo;re willing to cut spending and live a simpler lifestyle.
In Harry&rsquo;s case, he noticed that he could meet his retirement goals in his 60s by lowering his cost of living. If you want to see how much of an impact where you live has on your ideal retirement age, compare zip codes at Silvur&rsquo;s Cost of Living calculator. It compares healthcare costs, income taxes, and expenses. Then, in your Retirement Score, adjust your spending to find the right Retirement Score that gets you to your goal. These adjustments to your life have a big impact on your retirement finances, especially if you want to retire in your early 60s.

Even though the exact amount you need to retire varies from person to person, there are some universal factors to consider when planning for retirement. Check out the list below.
<ol>
<li style="font-weight: 400;" aria-level="2">&nbsp;If you want to retire in your early sixties, check your Retirement Score. </li>
<li style="font-weight: 400;" aria-level="2">Live lean&mdash;below your means&mdash;and invest the money you save toward your retirement. </li>
<li style="font-weight: 400;" aria-level="2">Test-drive your retirement budget for six months before you retire. Adjust it as needed. </li>
<li style="font-weight: 400;" aria-level="2">Plan out your income and withdrawal strategy that align with your goals. </li>
<li style="font-weight: 400;" aria-level="2">Set up an emergency fund with enough money to cover six months to one year of expenses. </li>
<li style="font-weight: 400;" aria-level="2">Make it a priority to pay off your mortgage before retiring. A mortgage-free house will be a gold mine when you retire. Maintain it well. If it&rsquo;s available where you live, investigate when you can apply for a freeze on property assessments. </li>
<li style="font-weight: 400;" aria-level="2">If you think you might want to live out your retirement in a different location, consider moving before retirement so it&rsquo;ll be easier to obtain a mortgage. This also allows you to ensure you like the area you&rsquo;ve chosen. </li>
<li style="font-weight: 400;" aria-level="2">Make a plan for health insurance coverage until you&rsquo;re 65. Familiarize yourself with all parts of Medicare. </li>
<li style="font-weight: 400;" aria-level="2">Make or update your will. Appoint a healthcare power of attorney. Draw up advance directives including a living will and organ donation specifics. Check into pre-paid funeral plans along with the insurances discussed in the earlier lesson &ldquo;Long-Term Care and Life Insurance.&rdquo; </li>
<li style="font-weight: 400;" aria-level="2">Store important papers&mdash;wills, deeds, mortgages, investments, etc. &mdash; in one safe place. Tell a trusted family member of its location.</li>
</ol>

Now that you have a better idea of what it takes to retire in your early to mid-sixties, it&rsquo;s time to employ a strategy that works for you. 
As a first step, get your Retirement Score. You&rsquo;ll be able to play out different scenarios to see what you can do to extend your Score based on your planned retirement age, Social Security election age, expenses, net worth, and healthcare costs.&nbsp;
Then, check out our Healthcare calculator to see how much your Medicare costs will add to your Score. And our Social Security calculator will show you the best age to elect Social Security benefits. Finally, our Cost of Living calculator will help you see how you could potentially increase your Score by moving to a lower cost of living area.

You’ve reached your early sixties. That means you’re definitely eligible for retirement - if you can afford it. Are you in good shape to retire? Here’s a look at how you compare to others your age. 

This class will explore employer-sponsored retirement plans, focusing on the differences between defined contribution plans like 401(k)s and defined benefit plans like pensions. It will cover the pros and cons of each plan type and how to choose the best plan for you.

This class will explore employer-sponsored retirement plans, focusing on the differences between defined contribution plans like 401(k)s and defined benefit plans like pensions. It will cover the pros and cons of each plan type and how to choose the best plan for you.

Learn about the budgeting and spending in retirement.

Learn about what's being proposed in the 2025 presidential budget for Medicare and Social Security.

Learn about what's being proposed in the 2025 presidential budget for Medicare and Social Security.

Learn about the Mistakes Retirees Make: Starting Too Late, Overlooking Best Practices, and More.

Learn about common retirement scams&mdash;and how to avoid them

Learn about the updates taking effect in 2024 and how they may impact your Retirement Score.

Learn about the updates taking effect in 2024 and how they may impact your Retirement Score.

Learn about whether working with a financial planner or advisor is right for you.

Learn about how the Roth IRA conversion works and decide whether it&rsquo;s right for you.

This class covers everything you need to know about the potential changes to both Medicare and Social Security in President Biden&rsquo;s budget&mdash;including a detailed breakdown of these budget line items, how the changes could impact you and what to do if you&rsquo;re currently retired and receiving these benefits or nearing retirement and planning to receive them soon.

This class covers everything you need to know about the potential changes to both Medicare and Social Security in President Biden’s budget—including a detailed breakdown of these budget line items, how the changes could impact you and what to do if you’re currently retired and receiving these benefits or nearing retirement and planning to receive them soon.



Here&rsquo;s what all California teachers should know when getting ready to retire.

Here’s what all California teachers should know when getting ready to retire.


When you&rsquo;re retired, protecting the money you&rsquo;ve built up over your working years is critical. Fortunately, there are several government programs designed to help ensure that individuals have access to their cash when they need it, no matter what happens to your financial institution.

When you’re retired, protecting the money you’ve built up over your working years is critical. Fortunately, there are several government programs designed to help ensure that individuals have access to their cash when they need it, no matter what happens to your financial institution.

If you find yourself retiring sooner than expected, here&rsquo;s what you can prioritize to keep your retirement in check.

If you find yourself retiring sooner than expected, here’s what you can prioritize to keep your retirement in check.

Here&rsquo;s your resource for everything women need to know about planning for retirement and making the most of their benefits.

Here’s your resource for everything women need to know about planning for retirement and making the most of their benefits.

Deciding when to retire with your partner? Well there&rsquo;s a few factors to consider ranging from age, healthcare, Social Security, and more. Find out if you and your partner should retire together or at different times.&nbsp;

Deciding when to retire with your partner? Well there’s a few factors to consider ranging from age, healthcare, Social Security, and more. Find out if you and your partner should retire together or at different times. 

You&rsquo;ve reached your 50s. But are you in good shape to retire? Here&rsquo;s a look at how you compare to others your age, along with helpful information to help you plan an early exit from the workplace.

You’ve reached your 50s. But are you in good shape to retire? Here’s a look at how you compare to others your age, along with helpful information to help you plan an early exit from the workplace. 

Retiring by the age of 65 requires some planning and forethought, but it's entirely possible if you make the right moves. In this course, you&rsquo;ll find all the steps you can take to retire when you're ready, as well as the apps and tools you can use to ease the transition.

Retiring by the age of 65 requires some planning and forethought, but it's entirely possible if you make the right moves. In this course, you’ll find all the steps you can take to retire when you're ready, as well as the apps and tools you can use to ease the transition.

Transitioning into retirement requires planning and preparation. However, there are some items you should prioritize before you leave the workforce. Here&rsquo;s what you should do now and what can wait until later in retirement.

Transitioning into retirement requires planning and preparation. However, there are some items you should prioritize before you leave the workforce. Here’s what you should do now and what can wait until later in retirement.

Have you ever dreamed about owning a boat or RV? To help turn that dream into reality, this class will teach you everything you need to know about budgeting, financing, insuring, and even saving money on your boat and RV.

Have you ever dreamed about owning a boat or RV? To help turn that dream into reality, this class will teach you everything you need to know about budgeting, financing, insuring, and even saving money on your boat and RV.

Even if you set up an estate plan decades ago, you might need to make updates. Here&rsquo;s what you need to know about estate planning in today&rsquo;s changing circumstances.

Even if you set up an estate plan decades ago, you might need to make updates. Here’s what you need to know about estate planning in today’s changing circumstances.

Here&rsquo;s our assumptions on how we calculate your Retirement Score. Learn more about your Retirement Score and what you can do to improve it.

Here’s our assumptions on how we calculate your Retirement Score. Learn more about your Retirement Score and what you can do to improve it. 

Make the most out of your IRA, based on your goals and retirement needs.

Make the most out of your IRA, based on your goals and retirement needs.

Learn the essentials for taking care of yourself and your family when a spouse dies. The lessons include understanding estate planning &amp; probate, managing changes to your Social Security, a checklist of people and institutions to notify, a review of your legal rights to the estate, and a guide to managing your spouse&rsquo;s retirement accounts.

Learn the essentials for taking care of yourself and your family when a spouse dies. The lessons include understanding estate planning & probate, managing changes to your Social Security, a checklist of people and institutions to notify, a review of your legal rights to the estate, and a guide to managing your spouse’s retirement accounts.

Along with retirement comes a chance to reflect on how this change will impact your financial life. Retirees who own a vehicle or property can take a look at their home and auto insurance to find savings and prepare for a prosperous retirement.

Along with retirement comes a chance to reflect on how this change will impact your financial life. Retirees who own a vehicle or property can take a look at their home and auto insurance to find savings and prepare for a prosperous retirement.

Inflation is always daunting. But that&rsquo;s even more the case when you&rsquo;re retired. Here&rsquo;s what you need to know about protecting your retirement income and dealing with inflation during retirement.

About this Class

Inflation is always daunting. But that’s even more the case when you’re retired. Here’s what you need to know about protecting your retirement income and dealing with inflation during retirement. 

When you&rsquo;re divorced, it&rsquo;s especially important to make sure that your estate plans are updated in retirement so that they reflect your wishes as they stand today, not as they were while you were married.

When you’re divorced, it’s especially important to make sure that your estate plans are updated in retirement so that they reflect your wishes as they stand today, not as they were while you were married.

Make sure you understand the importance of your estate planning documents in retirement &mdash; and keep them updated &mdash; no matter your marital or partnership status.

Make sure you understand the importance of your estate planning documents in retirement — and keep them updated — no matter your marital or partnership status.

Make sure you understand the importance of your estate planning documents in retirement &mdash; and keep them updated &mdash; no matter your marital or partnership status.

Here are the 2025 annual updates on costs and benefits coming to Social Security, Medicare, and ACA.

Here are the 2025 annual updates on costs and benefits coming to Social Security, Medicare, and ACA.

Scenario Planning Category

Retire by Age 60-64

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