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AARP The Magazine

Take Charge of Your Money at 60+

You may be retired, or thinking about it. Ensure you'll have the funds you need now and in the future.

What We Make And Save

The Plan for What You Make and Save

1. Defeat the grind

Now is the time, says Maryland financial adviser Tim Maurer, to realize that life isn't a "two-act play where you work your butt off and then retire. It's a three-act play, and people in their 60s are entering act two."

These are the years to explore a new professional passion. You may bring home a little less money and put in fewer hours, but your new job won't feel like work. Once you transition, he notes, "you may not make enough to contribute to your nest egg, but you also won't have to tap it."

A nest egg untouched can continue to grow, often tax-free, at least until age 70, when mandatory withdrawals typically begin. Staying employed also allows you to put off taking Social Security benefits until age 70, which brings with it an 8 percent bump in benefits for every year past your full retirement age that you delay.

2. Spark a sell-off

If you're like most 60-somethings, your income has already started to trend downward. It's time to take an honest look at where that money is currently going. That not only means the small things (such as reducing the number of premium cable channels you pay for and eating out a little less) but the larger ones (do you really need that second car now that your kids are out of the house?).

You can also work the other side of the equation — income — by doing some strategic decluttering, for cash: Go room by room and then list that mid-century bedroom set or your beloved comic book collection on eBay or Craigslist.

3. Launch a side project

One in four Americans ages 44 to 70 harbors dreams of becoming an entrepreneur, according to the Small Business Administration. If you're one of them, the time to make a move on that dream is now, while your career is still active. "Start part time at least three to five years before you retire," says financial planner Losey. "Do it in the evenings and on weekends. If it's profitable by the time you retire, keep it going."

Next page: The plan for how you invest. »

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