When retirement is nearing, you need to get your finances in order. If you weren’t already, now is the time to get laser focused on saving for your golden years.
Experts say that by age 60, you should have saved eight times your annual salary. This will help you be ready for retirement. This number should rise to 10 times your annual salary by age 67.
However, this isn’t a reality for many people. For example, 13% of Americans age 60-plus have zero retirement savings, according to a PwC report. Overall, the median retirement savings for 55- to 64-year-olds is $120,000, according to the report. This would likely provide less than $1,000 per month over a 15-year retirement.
If you still have some work — or a lot of work — to do before retiring, you’re clearly not alone. Here are six ways to get rich in your 60s so you can feel better about your money when you retire.
Are you in your 60s and worried that you’ve missed the boat on building wealth? I’ve got great news for you—it’s absolutely not too late! As someone who’s helped many clients navigate their financial journeys later in life I can tell you with certainty that your 60s can actually be a pivotal decade for making smart money moves.
With retirement on the horizon (or perhaps you’re already there), now is the perfect time to implement strategic financial decisions that will secure your peace of mind and boost your wealth This comprehensive guide will walk you through 15 proven strategies to help you build wealth in your 60s, regardless of your current financial situation
Why Building Wealth in Your 60s Matters
According to recent research, almost 60% of retirees in the United States depend on Social Security for most of their income. This is a pretty scary number when you think about the fact that Social Security was never meant to be your only source of retirement income.
The good news? You still have time to take control of your financial future. Your 60s offer unique opportunities to maximize your wealth-building potential—and I’m gonna show you exactly how to do it.
15 Powerful Strategies to Build Wealth in Your 60s
1. Maximize Your Retirement Contributions
If you’re still working, this is your chance to turbocharge those retirement accounts! The IRS allows “catch-up contributions” for folks 50 and older, letting you contribute more than the standard limits.
You can put up to $23,000 into your 401(k) in 2024, plus an extra $7,500 as a “catch-up” contribution. The catch-up amount for IRAs is an extra $1,000 on top of the regular limit.
If your employer matches your contributions, don’t miss out on the chance to get free money. These contributions are also tax-deferred, which means they lower your current taxable income while you build your nest egg.
2. Delay Taking Social Security
One of the simplest yet most powerful wealth-building strategies in your 60s is postponing Social Security benefits. For every year you delay claiming Social Security after your full retirement age (up to age 70), your benefits increase by approximately 8%.
This decision can make a substantial difference in your monthly income. In fact, retirees who wait until 70 can collect 50-70% more in monthly benefits compared to those who claim at 62. That’s a massive difference that compounds over your retirement years!
You can use the Social Security Administration’s online calculators to find out how much more you could earn if you wait.
3. Consider Downsizing Your Lifestyle
Bigger isn’t always better, especially in retirement. Downsizing your home can free up significant equity while reducing ongoing expenses like:
- Property taxes
- Utility bills
- Maintenance costs
- Insurance premiums
With the recent housing market boom, you might get top dollar for your current house. Plus, a smaller home usually means less stuff, which can be incredibly liberating!
As financial advisor Tom Corley says, “Living within your means is the secret sauce of wealth building. Every dollar saved is a dollar earned—and invested.”
4. Diversify Your Investments
I can’t stress this enough—diversification is crucial, especially as you enter your 60s! Spread your investments across different asset classes:
- Stocks (for growth)
- Bonds (for stability)
- Real estate (for income and appreciation)
- Alternative investments like REITs or ETFs
According to S&P 500 data, a diversified portfolio historically yields smoother returns, with stocks offering an average annual return of 10% over the long term.
Remember, you still need growth investments in your 60s since your retirement could last 20-30 years!
5. Build an Emergency Fund
Having a well-stocked emergency fund is critical at any age, but especially in retirement. Unexpected expenses can derail your finances if you’re not prepared.
Aim to have at least six months’ worth of living expenses in an easily accessible account. This fund will give you peace of mind and help you avoid tapping into your investments during market downturns.
6. Reduce Long-Term Risk with Cash and Bonds
In an ideal scenario, financial experts recommend having:
- 1-3 years’ worth of living expenses in cash
- 3-5 years’ worth of expenses in bonds
This strategy provides a safety net, ensuring you won’t need to sell stocks during market downturns to cover your living expenses. Keeping cash readily available also allows your bonds to mature appropriately before accessing them.
7. Plan Your Retirement Account Withdrawals Strategically
Once you understand how much you’ll need monthly for expenses (don’t forget to budget for travel and fun!), it’s time to schedule your withdrawals carefully.
Until recently, the conventional wisdom was to follow the “4% rule” for withdrawals. However, many experts now advise a lower rate when possible. Consider adjusting your withdrawals after particularly high-gain or big-loss years for your portfolio.
And always keep an eye on inflation! Your withdrawal strategy needs to account for rising costs over what could be a 20-30 year retirement.
8. Minimize Investment Fees
Investment fees can silently eat away at your returns over time. If you’re investing in mutual funds or working with a financial advisor, make sure you understand exactly what you’re paying in fees.
Consider low-cost index funds or ETFs, which typically charge much lower fees than actively managed funds. Over the course of your retirement, saving even 0.5% in annual fees can translate to tens of thousands of dollars in additional wealth.
9. Explore Part-Time Work or Side Hustles
Retirement doesn’t have to mean completely stopping work. Many retirees find that part-time jobs or side hustles not only provide additional income but also keep them active and engaged.
Options might include:
- Consulting in your former field
- Freelance work
- Turning hobbies into income (Etsy, eBay, farmers markets)
- Part-time retail or service industry work
Did you know that 20% of gig workers in the U.S. are now over 55? The gig economy offers unprecedented flexibility for seniors looking to supplement their income.
10. Pay Off High-Interest Debt
No retirement plan can flourish under the weight of high-interest debt. Make it a priority to eliminate credit card balances and other high-interest loans as quickly as possible.
The average credit card APR hovers around 20% – that’s a hefty fee to pay if you’re carrying balances! Consider transferring balances to 0% APR credit cards to buy some time to pay off debt interest-free.
11. Optimize Healthcare Costs
Healthcare is typically one of the biggest expenses in retirement. Fidelity estimates that a 65-year-old couple retiring today will need approximately $315,000 for healthcare costs in retirement.
Strategies to manage these costs include:
- Sign up for Medicare at the right time (avoid penalties)
- Consider Medicare Advantage plans that might better fit your needs
- Look into long-term care insurance options
- Use Health Savings Accounts (HSAs) if you’re still employed with a high-deductible health plan
12. Consider Long-Term Care Insurance
According to the U.S. Department of Health and Human Services, 70% of people over 65 will need some form of long-term care. Medicare typically doesn’t cover these costs, which can be substantial.
Purchasing long-term care insurance in your 60s can lock in lower premiums and protect your retirement savings from being depleted by extended care needs. This insurance can cover care in nursing homes, assisted living facilities, or in your own home.
13. Generate Passive Income from Assets
Do you have assets sitting idle that could be generating income? Consider:
- Renting out a spare bedroom on Airbnb
- Renting your car on Turo when not in use
- Leasing storage space in your garage or basement
- Renting tools or equipment you own but rarely use
The average U.S. Airbnb host earns around $900/month—that’s potentially an extra $10,800 annually to add to your retirement income!
14. Stay Financially Educated
The financial world evolves rapidly. Staying informed about new investment opportunities, tax law changes, and financial strategies is crucial for building and preserving wealth.
Consider taking a financial planning course, following reputable financial blogs, listening to podcasts, or attending webinars. Knowledge truly is power when it comes to managing your money effectively.
15. Work with Financial Professionals
Building a relationship with trusted financial professionals can pay dividends throughout your retirement. Consider working with:
- A financial advisor to help optimize your investment strategy
- A tax professional to minimize your tax burden
- An estate planner to ensure your assets are protected and distributed according to your wishes
These professionals can collectively work wonders for maximizing your wealth and providing peace of mind.
The Bottom Line: It’s Not Too Late to Build Wealth
Building wealth in your 60s might seem challenging, but with the right strategies, it’s absolutely achievable. Whether it’s maximizing retirement contributions, delaying Social Security, or exploring new income opportunities, there are numerous ways to strengthen your financial position.
Remember, wealth-building isn’t just about accumulating the largest possible nest egg—it’s about creating financial security and peace of mind so you can enjoy this exciting chapter of your life to the fullest.
The most important step is to start today. Even small changes implemented now can make a significant difference in your financial future. You’ve worked hard all your life—now it’s time to make your money work hard for you!
Have you implemented any of these strategies already? Which one will you try first? I’d love to hear about your experiences in the comments below!
Note: While these strategies have proven effective for many people, everyone’s financial situation is unique. Consider consulting with a financial advisor to tailor these approaches to your specific circumstances.
Time the Start of Social Security Benefits Right
When you start taking Social Security benefits matters. You can apply anytime between age 62-70, but the longer you wait to apply, the higher your monthly payment will be.
It’s important to carefully weigh the pros and cons of filing them as early as age 62, as late as age 70, or somewhere in between, said Chris Urban, CFP, founder of Discovery Wealth Planning.
“There is a tax element to this decision as well, so this could also be included as part of smart tax planning,” he said.
In recent years, it has become more popular to take on some type of employment during retirement, Urban said.
“Retirement these days is more of a ‘work-optional’ phase of life,” he said. “Many people enjoy the social interaction that work provides. ”.
This might involve getting a regular part-time job or joining the gig economy — for example, by becoming an Uber driver or pet sitter.
“Any additional income could also reduce the amount you would need to draw down from your retirement [and/or] investment accounts to fund your lifestyle,” he said.
Your money is likely going toward a variety of fees, so it’s important to know exactly how much you’re paying and what you’re paying for, Urban said.
“Know how much a professional charges and what you get in return to make sure this is a relationship worth keeping,” he said. “This could be a lawyer, accountant, financial advisor, etc. ”.
He said you also need to understand the fees embedded into mutual funds and/or exchange-traded funds in your retirement or investment accounts.
“Many people have no idea these exist,” he said. If you want to know how much these fees will cost you in the long run, you should pay close attention to this. ”.
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When retirement is nearing, you need to get your finances in order. If you weren’t already, now is the time to get laser focused on saving for your golden years.
To be financially prepared for retirement, experts say you should have eight times your annual salary saved by age 60. This number should rise to 10 times your annual salary by age 67.
For You: 4 Subtly Genius Moves All Wealthy People Make With Their Money
However, this isn’t a reality for many people. For example, 13% of Americans age 60-plus have zero retirement savings, according to a PwC report. Overall, the median retirement savings for 55- to 64-year-olds is $120,000, according to the report. This would likely provide less than $1,000 per month over a 15-year retirement.
If you still have some work — or a lot of work — to do before retiring, you’re clearly not alone. Here are six tips to build wealth in your 60s, so you can feel more financially prepared for retirement.
How To Make Money In Your 60s
FAQ
What is the best investment for a 60 year old?
Certain types of investments can help you save for retirement. These include 401(k) and 403(b) plans, traditional and Roth IRAs, cash-value life insurance plans, and guaranteed income annuities.
What is the $1000 a month rule for retirement?
The “$1,000 a month rule for retirement” is a simple way to figure out how much you need to save to have a steady monthly income in retirement. Usually, you’ll need to save $240,000 for every $1,000 you want to make each month. This rule, based on a 5% annual withdrawal and 5% annual return, suggests that withdrawing $1,000 a month from a $240,000 portfolio would provide that amount of income without depleting your savings.
What is a good net worth at 60?
A “good” net worth at age 60 varies, but the median net worth for the 55-64 age range is around $364,300, while the average is much higher at approximately $1. 56 million, due to the influence of wealthy outliers.
Can I retire at 62 with $400,000 in 401k?
Can You Retire at 62 With $400,000 in a 401(k)? It’s certainly possible to retire early on $400,000, but it won’t be easy. There is a good chance that working and saving for a few more years will make your retirement a lot more comfortable.
How to build wealth in your 60s?
In the meantime, unless you absolutely need the money to live on, keep the money in your retirement accounts fully invested – which is still the best way to keep building wealth in your 60s. Now, you may want to reallocate your portfolios so that you have less risk and more of your money invested in bonds and cash equivalents.
Is wealth after 60 the same as wealth before 60?
Yes, wealth after 60 is the same as wealth before 60 in the sense that you need to build (or continue to build) residual income from multiple streams to acquire it.
How can I build wealth in my 50s?
In your 50s, building wealth can be achieved through leveraging real estate. Existing or new purchases can provide extra income from rent and capital appreciation. For instance, you can rent out a room in your home using services like Airbnb. Another option is to rent out your vacation home.
How to build wealth in your 40s?
A debt-free plan It’s common to have education loans, car loans, a mortgage, credit card debt and other debts by age 40. At this point, you should have a solid financial plan for how to eliminate these debts. As you plan how to build wealth in your 40s, you should begin to shed credit card debt because it tends to have the highest interest rate.
How do over 60s make money?
Over 60s make money in ways you wouldn’t believe! Over 60s make money in ways you wouldn’t believe! Over 60s make money in all sorts of ways now. Loads are doing it too. For a start, according to Kings College London, a huge 32% of business are set up by over 50s, and a huge 23% of the self-employed workforce was over the age of 60 in 2023.
How do you build wealth in your 20s?
The most straightforward path to building wealth in your 20s is to buy assets and avoid liabilities. An asset is anything that tends to increase in value over time or pays you money simply for owning it. Some examples are real estate, stocks, bonds, websites, and businesses. When you spend one dollar on a liability, that dollar is gone forever.