Congratulations! You’ve reached your 60s.
Now you have a great retirement to look forward to — wait, you say you weren’t able to adequately plan for retirement?
No worries, the goal is still not out of reach!
Here are some thing you should consider if you hope to retire before you hit your 70th birthday.
Pick up your full employer match
If you have an employer match on your 401(k), now is the time to make sure you’re putting in as much as necessary to pick up the full match.
If you’re not, you’re leaving money on the table that could be yours. Employer matches can vary by a lot, but for many companies, the way it works is the employer will match maybe 50% of the worker’s contribution up to 6% — so if you contribute 6% of your annual salary to your 401(k), your employer will contribute 3%.
Play catch-up with your retirement contributions
The minute you become 50, you can start making an additional catch-up contributions to your 401(k), 403(b) plan or the federal government’s Thrift Savings Plan.
For 2017, you can make an extra $6,000 contribution. (That’s on top of the existing $18,000 contribution limit for these plans.)
If you have an IRA, the catch-up contribution is $1,000 above the usual limit for younger contributors. That means you can save $6,500 in an IRA in total this year.
Consider your personal disability quotient
Nobody wants their retirement plan fouled up by the inability to work in the latter years of their career!
Visit WhatsMyPDQ.org to assess your “personal disability quotient” (PDQ). This a free service of the Council of Disability Insurance. Your PDQ will predict the likelihood of you needing to use disability insurance during your working lifetime.
Once you have that info, you can make an informed decision about buying a short-term disability insurance plan.
Consider working longer if you’re able to
In the past, it was very common to retire and take Social Security at 62. But for every year you wait after 62, you have a roughly 8% return per year on your Social Security lifetime benefit. So if you wait from 62 to 70, the amount that Social Security pays climbs dramatically.
Working longer will also allow you to stash away more cash for your imminent retirement.
Get aggressive paying down your mortgage
Eliminating your mortgage before you go into retirement is a smart idea.
Here’s one simple strategy to get yours paid down: Set up your own bi-weekly payment schedule.
The net effect is you’ll make 13 payments in 12 months and slice several years off that debt!
Figure out the optimal time to claim Social Security benefits
There’s a whole litany of free retirement calculators from the Social Security Administration and other organizations to help you optimize that monthly check you’re going to be getting!
You may also want to consider using the Maximize My Social Security calculator. It costs $40, but it could be well worth the price.
Work with a fee-only financial planner
By now you’ve probably built up some assets in your life. It’s a good time to consider working with an advisor. But be sure he or she is what’s called “fee only.” That means they earn their income on an hourly or ongoing basis, not on commissions from the investments they steer you toward.
Find a part-time job in retirement
Just because you’re approaching retirement, it doesn’t mean you cease being a productive member of society! Maybe you want to boost your monthly income or just try your hand at something new — there are a lot of reasons to consider working part-time in retirement. Here’s a list of great part-time jobs for retirees.
Consider an immediate annuity
When you retire, you may not have enough money to provide for your monthly needs from savings. So there are companies that turn a supply of money — you typically need a minimum of $100,000 — into a lifetime stream of income.
Immediate payout annuities (also called life annuities) are entirely legitimate, but they have so little in the way of commissions that they’re never pushed by salespeople. You can get a quote for an immediate annuity from ImmediateAnnuities.com. If you have military service, you’ll also want to get a quote from USAA and maybe TIAA-Cref.
Whatever you do, make sure you stick with an insurer who is rated A++ by A.M. Best. An A++ rating indicates the utmost financial strength and that the insurer will be there for the long haul.
Planning to live a long time? Consider longevity insurance
Another kind of annuity is a longevity annuity (also called longevity insurance or deferred-income annuities.) This is a simple insurance product you buy at retirement age that doesn’t start paying a living benefit until you hit 85.
The idea is that with a longevity policy in place, you could plan to blow through all the cash in your retirement plan through age 84. Because the minute you turn 85, you get a check every month for as long as you live.
Insurers offer a great benefit on longevity policies. They know from actuarial tables that most people who buy the policy won’t live to receive any money. But if you do live to age 85, you get that nice monthly check.
You won’t hear a lot of insurance agents talk about longevity policies because the commissions on them are so small. But they can be a great idea for so many situations where people might otherwise outlive their money.
If you want to explore the idea of buying a policy, ask the agent for “the insurance policy that doesn’t pay any money until age 85.” Different people call it different things, but they’ll know what you mean based on that description.
Follow the 4% rule
Want another way to not outlive your money? Then you’ve got to know about the 4% rule!
Often cited by financial planners, the 4% rule says that you can preserve your principal for years to come if you only withdraw up to 4% each year.
So let’s say you have a $1 million portfolio in your 60s when you’re getting ready to retire. Using the 4% rule, you would be able to take $40,000 per year out of savings to live on.
In theory, your money should then last more than 30 years — when you’d be in your 90s!
Read more: Money expert Clark Howard’s investment guide