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 retirement?
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 life.
Sound Body, Sound Mind
When caring for an older adult, it's important not to overlook routine care -- stuff that seems obvious but that may not be on your radar. Here is a rundown of what to keep in mind.
Everyone needs regular checkups. But some older adults (and young ones, too) reason that since they just saw the doctor last month about that sinus problem, they don't need to go again. A visit to the doctor for a specific problem, however, doesn't take the place of a complete checkup.
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 http://www.nefe.org/latesavers/partone.html.
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."