Maintaining healthy finances as you approach 65 is just as important as
getting regular medical checkups. Are you doing everything you should be doing
to get your financial house in order for an active and comfortable
Experts from the American Association of Retired Persons and the National
Council on the Aging offer these top
ten tips to make sure you're fiscally ready for the next stage of your
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Do a retirement calculation. Do you know how much you need to have saved to
live comfortably after retirement? Most people are "saving blindly,"
says Jon Dauphine, the AARP's Director of Economic Security and Work Programs.
About half of people queried in retirement confidence surveys think they'll
need less than 70% of their pre-retirement income. But experts say you should
plan on at least 80% to 90% of what you're making now. The retirement
calculator at www.asec.orgwww.asec.org will tell you how much you need to have
saved to keep up your standard of living in retirement. (Use the annual Social
Security statement that you should be getting within a month of your birthday
to help you estimate how much that will contribute.)
Catch up on your savings. Did the retirement calculator's results scare you?
You're not alone. Most people haven't saved as much as they should for
retirement. The National Endowment for Financial Education offers
"retirement catch-up strategies" for late savers online at
Maximize tax-deferred accounts. One way to catch up on retirement savings:
make "catch-up" contributions to your IRA or 401(k). Once you've
reached the age of 50, you're allowed to contribute more tax-deferred dollars
to those accounts. For example, at the age of 49 you can put up to $13,000 in
your 401(k) tax-free; but at 50 and above, you can put an additional $3,000
away each year, says Dauphine. The same applies to IRAs: the annual maximum
tax-deferred contribution of $3,000 goes up by $500 when you reach 50.
Don't lose out on benefits. Millions of older adults are eligible for
various benefits from federal, state and local agencies--both private and
public--but don't know about them, says Scott Parkin, spokesperson for the
National Council for the Aging. They've launched BenefitsCheckUp®
(www.benefitscheckup.org. ), an online tool with information about some 1,150
different programs in all 50 states and the District of Columbia. "These
include everything from energy assistance and property tax relief to things
like the Golden Passport, which gives you a discount on admission to all
national parks," Parkin says. "There's nothing quite like it."