Deciding when it’s the right time to retire is never an easy decision. If you’ve spent your life in a profession, then suddenly giving it all up in a day is a bittersweet moment. However, having your finances in order from working all those years was the goal from the beginning. Think about investing in your 60s as a horizon in your work life. The government determined retirement age is around 70 years old, but you don’t have to quit when you begin to receive social security.
Working gives a lot of people energy and motivation. For that reason, some people choose to work until they reach 80 years old or beyond. Others see people who choose to work when they don’t have to as having some super-power. They never see themselves that way. Professionals gain a considerable amount of satisfaction from what they do for others.
In some cases, their clients won’t let them quit. That’s a special bond that can’t be duplicated. If you want to continue working, then it makes sense to think about what investment options make sense in your 60s.
Pre-retirement investment review
There’s an extraordinary period before you submit your notice of resignation called pre-retirement. Pre-retirement is mostly a review period. It’s a series of meetings that you have with your financial advisor where you determine if the performance of your investments has you on track to retire as planned.
Many plan sponsors offer target-date funds that simplify the investment election period for employees. You simply choose the year that you plan to retire and invest in those funds. They automatically lower the amount of risk among your assets, the closer you get to reaching your planned year of retirement. They won’t work for everyone because other employee retirement income securities act (ERISA) investment vehicles generate higher returns without significantly elevating the risk in your portfolio.
The pre-retirement analysis isn’t always an enjoyable experience, especially if you had hoped to be able to stop working a specific year but don’t yet have enough in your retirement account. It isn’t welcome news if the income that you need to live on stipulates that you must continue working. Alternatively, you will stick with the planned retirement date but realize that you must live on less income during retirement.
Investing in your 60s
Making high risk or speculative investments in your 60s is highly discouraged. If you choose to begin making new investments in your 60s, you have many low-risk securities to consider:
- Certificates of deposit (CDs)
- US Treasury bonds/bill
- Index Funds
- Municipal Bonds (check the maturity dates)
- Money Market funds
- Exchange-Traded Funds (ETFs)
- Precious metals
You will notice that all the asset classes listed above are all highly liquid and no to low risk. Each asset class has numerous broker products from which to choose. You can begin researching some of the different financial institutions online before you begin speaking to your financial advisor about making decisions.
Working after retirement
As mentioned before, retirement is not a hard and fast date. It is merely an investment and career benchmark. You may have friends that picked up a new hobby or part-time career after they retired. That’s a great idea, especially if you want to continue to see your retirement accounts grow through adding capital or combining new asset types in your investment portfolio.
Find something that you love to do or make with your hands and sell it locally or online. What did you once enjoy doing, but because you were in school or working or raising kids, you didn’t have the time? Well, now, you do!
Find a financial advisor you can trust
Retirement planning is a balancing act. Once you walk away from your full-time job, you are not looking back, and you shouldn’t be. You should be looking forward to a positive change in how you live with the new time you have available to enjoy life. Navigate those critical final decisions with an experienced wealth advisor from SD Mayer. Serving the San Francisco Bay area with decades of consulting and accounting experience, our wealth management professionals can make sure your retirement horizons are golden.
You’ve lived a lot of life and aren’t slowing down yet. Investing in your 60s has some special considerations, and SD Mayer advisors have decades of experience helping individuals invest in every decade of life, whether it’s your 20s, 30s, 40s, 50s, or 60s. To learn more or to set up an initial consultation, contact us.
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