6 Money Mistakes You Need to Avoid in Your 60s
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3. Spending Too Much
Now you’ve got all of this extra time on your hands, you’ll likely want to spend it on vacation or eating out often. In fact, retirees often overspend because they are used to be able to see their bank account replenished. But, when your primary income is passive income or Social Security, you need to think before you spend.
If you are living paycheck to paycheck right now, or have a lot of debt, tackling it before you retire is your best course of action. Otherwise, you can outlive your retirement fund leaving yourself in a vulnerable position. Another way to save money is cutting down on your monthly spending. Consider switching your cable plan for a replacement like Sling TV.
As a general rule, you should use the 4% retirement rule. By spending just 4% of your retirements annually, studies show that you shouldn’t outlive your retirement fund.
4. Drawing Social Security Too Soon
Once you reach the age of 62-years old you can start claiming Social Security benefits, but if you wait longer you can make the most of your payments. It’s possible to both retire before the age of 66 years and 2 months, and start getting payments. However, your benefits will be at least $100 less each month.
Instead, it’s a good idea to get a part-time job for a couple of years or live from your pension or 401(k)/IRA until you turn 66. Additionally, if you can wait till 70 you will have maxed out the benefit period and receive the largest amount possible. The greatest solution to this is waiting. Especially, if you’re predicted life-span reaches well beyond your 70s.
