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So, You Want to Retire by Age 60? Take These 6 Steps to Make it Happen Thumbnail

So, You Want to Retire by Age 60? Take These 6 Steps to Make it Happen

Wondering if you’re on track to retire? Let’s see if you’ve taken the necessary steps.

A study from TD Ameritrade found that about 50% of Americans would like to bid farewell to mandatory employment by age 60. Successfully achieving such a benchmark is another matter. 

By laying the proper groundwork now, not only can you be fully prepared when retirement age approaches, you may even be able to retire by age 60.

Step 1 - Visualize Your Retirement 

Have you thought about what you want your post-work life to look like? In other words, what would a typical day consist of once you’re not spending most of your waking hours at work? What do you want to do? Travel? Take up a new hobby? Learn a new skill? 

Where do you want to live once you retire? The answer should not only focus on what city and state (or even country) you hope to call home, but also what type of housing you expect.

The answers to these questions have different costs associated with them, making it critical for you to carefully outline even the smallest details of your ideal retirement so you can define how much money it will take to fund your dream.

Step 2 - Determine Income Need

Once you have a handle on what your ideal retirement will look like, it’s time to document your plan for achieving your retirement number (i.e., financial goal).

Your plan will account for the specific costs associated with your retirement life, adjusting for inflation and accounting for market fluctuations and potential setbacks.  

Step 3 - Detail Retirement Income

What will be the source of your retirement income? Consider every income stream you anticipate having in retirement - Social Security, pensions, severance, savings and retirement accounts, rental income, and royalties.

Step 4 - Discover Alignment

Now, based on your vision and retirement number, you may need to change how you manage your money to reach your ideal financial target. Do you need to save more aggressively to reach your goals on time? Earn more? 

There are a variety of steps you can take to support the life you envision for your future. For example, a general rule of thumb is to save at least 15% of your household income for retirement, more if you’re not quite on track. 

Step 5 - Eliminate Debt

One of the most critical steps to take to prepare for retirement, regardless of retirement age, is to eliminate debt. You’ll want to be debt-free before retiring, and that includes fully paying off your mortgage. 

Why is this so important? Because few things will derail or delay your ability to retire as much as having debt. 

Step 6 - Review Your Investments

As you outline your retirement action plan, review your current investment holdings. You’ll want to have confidence that your portfolio is working as hard as it can to get you where you need to be. Having enough diversification in your holdings can protect you from market shifts while also generating enough growth to keep your portfolio ticking upward on pace with your retirement targets. 

A financial advisor can be essential here to help you review your portfolio’s rate of return and projected growth trajectory and determining whether your investments are poised to maximize growth while minimizing risk as you near retirement age.

Final Thoughts

More often than not, the mistakes that can most negatively impact your retirement plans are the ones you don’t see coming.  

For this reason, working with a fiduciary financial advisor who has a clear understanding of your full financial picture can make all the difference in your quality of life in retirement. 

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