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Retirement prep and life in your 60s: what you need to know

Whether you’re still contributing or you’re ready to spend down, you can take action now – to better enjoy your retirement years.

Is retirement on your doorstep? Are you recently retired? Here are some considerations and tips as you wade into the retirement waters.

An important step to gearing up for retirement is figuring out all your sources of income. And being realistic. Here’s a checklist of things to consider when preparing for retirement:

  • The current mix of investments in your portfolio
  • Your current assets
  • Your anticipated future assets vs. income
  • When you want to start receiving Social Security
  • How you’ll pay for health care costs
  • The tax impact of drawing down your assets over time

After taking inventory of your income, if you’re not sure there’s enough in savings to retire — don’t worry, you have options.

Health care and Social Security are also probably top of mind right now. There are some important factors you should consider.

Now is also the time to make sure you don’t have all your eggs in one basket and you’re investing more conservatively overall.

Here are some more considerations as you prepare for retirement. And once you retire, there are things to think (or not think) about.

Preparing for retirement: the 3 biggest retirement income factors

As you near retirement, it’s important to keep in mind three factors that can have a significant effect on your retirement income:

Paying for health care in your 60s

We all know health care is expensive. And the costs continue to rise faster than inflation.

That’s why it’s crucial that you factor in enough in these costs in your retirement income budget — and be aggressive in how much you save for your future health care. You may also want to ask a financial professional about long-term care alternatives.

Studies estimate couples in retirement need approximately $300,000 saved (after tax) to cover health care expenses in retirement.1

Your Social Security benefits

When should you take Social Security? This is an important decision that will affect your retirement income for years to come.

A financial professional can help explore your claiming strategies, and you can also check out your Social Security benefits information at Take the time to evaluate when you’d like to start receiving benefits.

$1,657 is the average monthly Social Security benefit for retirees2

Account for inflation

This is the tendency of prices to increase over time, which can have a big impact on your purchasing power and lifestyle in retirement. It’s also unpredictable and erodes the value of your assets, especially if those assets earn less than the rate of inflation.

Over the last two decades, inflation has trended around 3 percent. Currently, it's trending higher. It’s wise to add a margin of 1 percent to that for your income strategy plan.

Ways to increase your retirement savings

Even though retirement is right around the corner, it’s never too late to save, save, save! Continue to increase your saving — with a goal of contributing at least 15 percent, or more, of your earnings.

  • If you own a home, try to pay off your mortgage before you retire.
  • Don’t take money out of your retirement savings to pay for your children’s education.
  • Pay attention to the amount of debt you take on and pay it off before retirement.
  • Review your current life insurance coverage — do you need more?
  • Invest the maximum amount in your employer-sponsored 401(k), as this will likely fund a big part of your retirement. These plans typically allow you to save on a pre-tax basis while your assets grow tax-deferred. Income taxes are due when you begin taking withdrawals.
  • Consider an annuity.
  • Consider a Roth or traditional IRA to invest above the amount allowed in your retirement plan.
  • Review your diversification. And know your risk tolerance. Diversification does not prevent loss, but it is a method used to manage risk.

Calculating your retirement income needs

How much income do you need? Typically, you’ll want to save about 75-85 percent of your pre-retirement income. Since it’s hard to predict your spending, add 5-10 percentage points to that just to be safe.

Working longer — or part time

You can delay retirement or continue working in retirement to boost your retirement income.

If you choose to do this, you’re not alone. According to AAG, almost half of the more than 1,500 Americans aged 60 to 75 surveyed said they plan to work part-time after they retire from full-time work. Nearly one-fifth of respondents said they will work past the age of 70.3

Working longer can provide both financial and social benefits. If you do decide to phase into full retirement while collecting Social Security, your benefit may be subject to income tax depending on your total household income.

Tips for living in retirement

Congratulations! The golden years are finally upon you. Now you can enjoy spending your nest egg you’ve worked so hard to build. And that’s worth repeating. Enjoy yourself!

When and how much to withdraw

How much you decide to withdraw and how frequently you make your withdrawals is one of the biggest challenges of a successful retirement income strategy.

Consult your financial professional to determine a rate that's right for you and your objectives and desired lifestyle. It’s important to get it right — especially in the first few years of your retirement. Your long-term financial security depends on it.

Enjoy your time and don’t worry

No matter what, stop worrying about the things you can’t control — like market returns, taxes, or legislation that could affect your savings or benefits.

Instead, manage your emotions and stay true to your investment strategy. Consider working with a financial professional who can coach you through volatile markets. You don’t have to navigate retirement all on your own. 

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1. ”How to plan for rising health care costs,” Fidelity, August 31, 2021.

2.  Brandon, Emily. "How Much Will You Get From Social Security," U.S. News & World Report, December 20, 2021. 

3. Gosh, Palash. "A Third Of Seniors Seek To Work Well Past Retirement Age, Or Won’t Retire At All, Poll Finds," Forbes, May 6, 2021.


This information is a general discussion of the relevant federal tax laws provided to promote ideas that may benefit a taxpayer. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. Taxpayers should seek the advice of their own advisors regarding any tax and legal issues specific to their situation.

An annuity is intended to be a long-term, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax-qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but tax and penalties may apply to non-qualified distributions. Please consult a tax advisor for specific information. There are charges and expenses associated with annuities, such as deferred sales charges for early withdrawals.

Investments will fluctuate and when redeemed may be worth more or less than originally invested. 

DOFU 2-2022