6 Money Mistakes You Need to Avoid in Your 60s

iStock.com/sc0rpi0nce

5. Required Minimum Distributions

Once you reach the age of 70½ years old, you must start making required minimum distributions (RMDs) on your tax-deferred 401(k) or IRA contributions – unless you have a Roth account. And, you have to start withdrawing the money, even if you aren’t ready to.

Federal Law requires you to start making these withdrawals at the age of 70½ because they want their tax money. Your brokerage will most likely send you a letter stating the amount you must withdraw. On top of that, you’ll be responsible for paying tax on it.

To avoid RMDs make use of a Roth 401(k) or Roth IRA instead. In your later years, make contributions to your Roth accounts – the only difference is that you’ll pay the tax upfront. This way, the government aren’t worried about when you withdraw what, so there are no RMDs for Roth accounts.

6. Not Having a Hobby

As a soon-to-be retiree, you would have lead a busy life for the past 50 or more years. But, once life slows down some don’t enjoy their retirement due to lack of activity. A great benefit of retirement is that you can afford not to work anymore. However, that doesn’t mean you shouldn’t do anything. If you’ve ever had to stay at home for more than a few days then you’ll know how boring that is.

Instead, get a hobby or two. By keeping healthy and stimulating your mind you are scientifically proven to live longer. If you don’t already have a hobby, find something to do that you love, or why not get a hobby that will make you some extra money?