Financial Steps to Take When You're 65+

Here are 10 tips to make sure you're financially ready for retirement.

4 min read

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.

  1. 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.orgwill 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.)

  2. 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

  3. 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.

  4. 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® (, 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."

  5. Customize your investment plan. Most people will want to moderate the risk profile of their investments as they approach retirement, moving funds out of higher-risk stocks and into lower-growth (and lower-risk) investments. But don't get out of equities entirely, says Dauphine. "Chances are that you could live 25 years or longer in retirement, so you need to be careful about the 'decumulation' phase and make sure that you have enough money to see you through," he says. "In today's low-interest environment, it can be advisable to stay in some higher-return investments."

  6. Investigate long-term care insurance. The longer you wait, the more expensive it becomes. If you lock in a policy at age 50, for example, you may only pay between $10 and $50 a month, depending on coverage. If you wait until 65, the same coverage will cost between $40 and $150 a month. The AARP offers one such plan through MetLife; find out more at

  7. Consider what you'll do after retirement--and when you'll retire. More and more boomers are saying they plan to retire after 65, or work at least part-time past retirement, says the NCOA's Parkin. "Think about what you want your life to look like after retirement. What do you want to do with your time?" says Dauphine. "Don't leave the workforce until you're really sure you want to and are ready to financially, because it's a lot harder to get back into the workforce than it is to change jobs or ask a current employer for more flexible options."

  8. Choose a good financial adviser. As tax laws, savings options, and benefits become more and more complicated, it's almost impossible to understand your options on your own. You'll navigate the confounding waters of retirement planning better with an experienced guide. "Hire a planner before you retire, someone who'll look at your whole financial picture, from wills and trusts to insurance and advance medical directives," says Dauphine. To find a good adviser, talk to neighbors and friends for references, and interview several. Your best bet, says Dauphine: a Certified Financial Planner (, who must pass an examination and live up to a code of standards and ethics.

  9. Get an advanced medical directive and financial power of attorney. Without an advance medical directive, your estate may be depleted by extreme medical measures you never wanted, since you neglected to put your wishes in writing. And a carefully crafted financial power of attorney will put your money matters in the hands of someone you trust should you become incapacitated. You can learn more about these issues on the AARP's site at

  10. Organize your estate. It's uncomfortable to think about a time when you won't be here anymore, but better to do it now, when you have time to reflect and get sound advice. If you don't yet have a will, now is the time to make one out. You should also consider a living trust so your heirs can avoid probate, as well as ways to limit estate taxes.

Published March 2004.
Medically updated October 2005.