How to Invest for Retirement at Age 60

Shawn Plummer

CEO, The Annuity Expert

Reaching 60 and thinking about retirement might seem daunting, but it’s never too late to start investing for a comfortable and secure future. This guide will explore strategies and investment options to help you build a solid retirement plan, even at age 60. By taking a people-first approach, we aim to provide clear, actionable guidance you can understand and relate to. So, let’s dive in and explore how to invest for retirement at age 60 and enjoy your golden years to the fullest.

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Assess Your Financial Situation

Evaluate your current assets and liabilities.

Start by taking a comprehensive look at your current financial position. List all your assets (including property, savings, and investments) and liabilities (such as mortgages, loans, and credit card debt). This will give you a clear picture of your net worth and help you plan your investment strategy accordingly.

Estimate your retirement expenses.

Next, you need to estimate how much money you’ll need to cover your living expenses during retirement. Consider housing, healthcare, travel, and hobbies when calculating your retirement budget.

Determine your investment time horizon.

At age 60, your investment time horizon is typically shorter than someone starting to invest at a younger age. Therefore, you must determine how long until you plan to retire, influencing the investments you should consider.

Is It Too Late To Start Investing At 60

Establish Your Investment Goals and Risk Tolerance

Set clear and realistic goals.

Establish specific, measurable, achievable, relevant, and time-bound (SMART) investment goals. These might include generating a certain amount of income, preserving capital, or achieving a specific return on investment.

Assess your risk tolerance.

It’s essential to understand your risk tolerance when choosing investment options. As you approach retirement, you might be more risk-averse, so balancing capital preservation and growth is crucial.

How To Invest For Retirement At Age 60

Diversify Your Investment Portfolio

Allocate assets strategically

A well-diversified portfolio can help minimize risk and maximize returns. Allocate your assets across different investment classes, such as stocks, bonds, and real estate, to spread risk and create a balanced portfolio.

Consider low-cost index funds and ETFs

Low-cost index and exchange-traded funds (ETFs) can offer broad market exposure with minimal fees, making them an attractive option for investors at any age, including those nearing retirement.

Invest in dividend-paying stocks.

Dividend-paying stocks can provide a steady income stream and the potential for capital appreciation. Consider investing in high-quality, blue-chip stocks with a solid dividend record.

Prioritize Retirement Accounts

Maximize contributions to tax-advantaged accounts.

Maximize contributions to your 401k, IRA, or other tax-advantaged retirement accounts. At age 60, you’re eligible for catch-up contributions, which allow you to contribute more than the standard annual limit.

Consider a Roth IRA conversion.

Converting to a Roth IRA may be beneficial if you possess a traditional IRA. Though one must pay taxes in the conversion process, withdrawals from this account during retirement are ultimately tax-exempt. This setup could prove advantageous and improve your financial well-being upon retiring!

Seek Professional Advice

Consult a financial advisor.

Working with a financial advisor can help you develop a personalized investment strategy tailored to your unique circumstances, goals, and risk tolerance.

Stay informed and monitor your investments.

Regularly review and adjust your investment strategy as needed. Stay informed about market trends and economic developments that could impact your portfolio.

Investment Portfolio For 60-Year-Old

Protecting And Growing Your Retirement Investments At Age 60

A fixed-indexed annuity (FIA) can be a valuable investment option for a 60-year-old looking for protection from market volatility and a guaranteed income for life. Here’s how FIAs work and why they can be an attractive option for someone nearing retirement:

Protection from market volatility:

Fixed-indexed annuities are insurance products that provide potential growth while limiting exposure to market fluctuations. The growth of an FIA is linked to the performance of a market index, such as the S&P 500. When the index performs well, the annuity earns interest up to a sure cap or participation rate. However, when the index performs poorly, the annuity’s value remains protected, as it does not experience any loss in value. This protection from market downturns can be particularly appealing for someone at age 60 who may have a lower risk tolerance and seek to preserve their capital.

Guaranteed income for life:

One of the most significant benefits of a fixed-indexed annuity is the option to convert the annuity into a guaranteed income stream for life, known as annuitization. This feature ensures investors receive a steady, predictable income during their retirement years, providing them with financial security and peace of mind. The amount of guaranteed income depends on various factors, including the annuity’s value, the investor’s age and gender, and the specific terms of the annuity contract.

Flexible payout options:

In addition to providing a guaranteed income for life, fixed-indexed annuities often offer various payout options to suit the investor’s needs. These options may include lump-sum withdrawals, systematic withdrawals, guaranteed income, and access to the annuity’s principal.

Tax-deferred growth

Fixed-indexed annuities provide tax-deferred growth, meaning that interest earnings within the annuity are not taxed until they are withdrawn. This tax-deferred growth allows the annuity’s value to compound more quickly, potentially leading to higher returns over time.

Next Steps

Investing for retirement at age 60 may seem challenging, but with the right strategies and a people-first approach, you can still build a secure financial future. Start by assessing your financial situation and establishing clear investment goals that align with your risk tolerance. Then, diversify your investment portfolio, prioritize retirement accounts, and consider seeking professional advice to develop a tailored plan.

Following these steps and staying informed about market trends can create a well-rounded investment strategy that helps you achieve your retirement goals. Remember, it’s never too late to start investing for a comfortable and secure retirement, and taking action now can make a significant difference in your golden years.

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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