Retirement Checklist for Your 60s

As your retirement years get closer, now is a critical time to think about when you want to retire and how much income you will need in retirement. Because of fewer pensions and other sources of reliable income, much of your retirement income will likely come from your personal savings.

Now is the time to stay focused on maximizing your retirement savings while also looking ahead to develop a retirement income plan that supports your vision of retirement.

1. Maximize your savings

• Build additional retirement assets by taking advantage of "catch-up" contributions.
  • A catch-up contribution is an elective deferral to a qualified employer sponsored retirement plan (QRP), such as a 401(k), 403(b), or governmental 457(b), that is made by a participant age 50 or older that exceeds a statutory limit, a plan-imposed limit, or the actual deferral percentage test limit for highly compensated employees. 
  • You can contribute an additional $1,000, above the annual maximum amount to your IRA. Visit irs.gov for more information.
    
• If you’re not already doing so, think about contributing up to the maximum contribution amount per year to your QRP. If you’re not able to do this, try to contribute at least as much as the employer match, otherwise you are leaving money on the table.
• Think about contributing the maximum amount each year to your IRA. You are still eligible to contribute to an IRA whether you fund a QRP or not. By maximizing your annual IRA contribution, you can supplement your savings and gain access to a potentially wider range of investment choices than with your QRP.
• Set up a recurring transfer to your IRA, or increase the amount you’re already auto-transferring.
• Avoid taking loans or distributions from your QRP before you retire.
• Don’t make the mistake of assuming that IRA or QRP contributions are enough.
• Depending on your retirement goals, you might need to be saving more of your income while in your 60s.
• IRA and QRP contribution limits could mean you need to save extra in taxable accounts like a brokerage account.
• Consider adding bonuses, tax refunds, or other lump-sum payments to your retirement savings.
• Maintain an emergency fund of six months' expenses.
  
  

2. Develop your income plan

• At this point in life, retirement may seem more like a reality and less like a far-off plan. Points to consider when developing your retirement income plan include the following:

  • Create a realistic retirement budget.
  • Analyze your essential and discretionary expenses to determine how much flexibility you have to reduce expenses when circumstances dictate.
  • Identify sources of income in retirement including Social Security, retirement savings, pensions, investments, etc. 
  • Compare your expected income to your projected expenses to determine if you are on track to cover all of your expenses in retirement.
  • Build an investment strategy that generates income in retirement while giving your assets the potential to grow.
  • Visit Income in Retirement to learn more about developing your income plan.

• Simplify your finances to better track your assets and manage your spending.

  • Consider consolidating your retirement savings into an IRA. 
  • Evaluate options for retirement assets left at former employers. Know that what you choose to do with your current retirement savings can have a substantial impact on your future.

  You generally have four options for your QRP distribution:

  1. Roll over your assets to an Individual Retirement Account (IRA)
  2. Leave your assets in your former employer's QRP, if the plan allows
     
  3. Move your assets to your new/existing employer's QRP, if the plan allows
     
  4. Take your money out and pay the associated taxes

  Each of these options has advantages and disadvantages and the one that is most appropriate depends on your individual circumstances. You should consider features such as investment choices, fees and expenses, and services offered.

  When considering rolling over assets from an employer plan to an IRA, factors that should be considered and compared between the QRP and the IRA include fees and expenses, services offered, investment options, when distributions are no longer subject to the 10% additional tax, treatment of employer stock, when required minimum distributions begin and protection of assets from creditors and bankruptcy. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with employer-sponsored retirement plans. You should consult with the plan administrator and a professional tax advisor before making any decisions regarding your retirement assets.

• Tailor your finances by opening a Prime Checking account.

3. Protect yourself and your loved ones.

• Consider insurance protection to help you plan for the unexpected.

  • Learn about long-term care insurance.
  • Estimate and add the cost of insurance to what you’ll spend in retirement.

We are here to help you take the steps that are right for you to and through retirement. To get started, contact a Wells Fargo Retirement Professional today.