Finance
8 Financial Tips to Follow When You Hit 60
Table of Contents
- Introduction
- The 8 Financial Tips at a Glance
- Tip 1: Reassess Your Retirement Timeline Honestly
- Tip 2: Eliminate All Remaining Debt Before Retirement
- Tip 3: Maximise Catch-Up Contributions
- Catch-Up Contribution Limits (2024)
- Tip 4: Develop a Strategic Social Security or State Pension Plan
- Tip 5: Rebalance Your Investment Portfolio for the Next Phase
- Tip 6: Plan Seriously for Healthcare Costs
- Tip 7: Create or Comprehensively Update Your Estate Plan
- Tip 8: Build Multiple Streams of Retirement Income
- Conclusion
- Frequently Asked Questions (FAQ)
- External References & Further Reading
Introduction
Turning 60 is one of life's most significant financial milestones. It is the decade during which the abstract concept of retirement transforms into an approaching reality — one that demands a clear-eyed review of where you stand, what you have built, and what needs to change before you step away from full-time work. For some, 60 arrives with a well-funded retirement account, a paid-off mortgage, and a clear plan. For many others, it arrives with a mix of progress and gaps, ambitions and anxieties.The good news is that your 60s — particularly the years from 60 to 65 — represent a uniquely powerful window of financial opportunity. Income is typically at or near its lifetime peak. Children are often financially independent. Mortgages may be nearly paid off. And the government provides specific financial incentives — in the form of catch-up contribution limits, early pension access, and Social Security planning windows — that make this decade unlike any other for retirement preparation.
This guide presents eight essential financial tips for everyone who has reached or is approaching 60. Each tip is grounded in current financial planning guidance and has been structured to help you maximise this critical window, protect what you have built, and design the retirement income strategy that will sustain you through decades of post-work life. Whether your retirement is five years away or fifteen, these actions taken today will shape your financial security tomorrow.
The 8 Financial Tips at a Glance
The table below provides a quick reference overview of all eight tips, their primary goals, and their relative priority for your financial planning:| # | Financial Tip | Primary Goal | Priority Level |
| 1 | Reassess Your Retirement Timeline | Align savings with realistic retirement date | Critical |
| 2 | Eliminate All Remaining Debt | Enter retirement debt-free | Critical |
| 3 | Maximise Catch-Up Contributions | Boost retirement accounts in final years | High |
| 4 | Plan Your Social Security Strategy | Optimise lifetime Social Security income | High |
| 5 | Rebalance Your Investment Portfolio | Shift from growth to preservation | High |
| 6 | Plan for Healthcare Costs | Cover the biggest retirement expense | High |
| 7 | Create or Update Your Estate Plan | Protect assets and honour your wishes | Medium |
| 8 | Build Multiple Retirement Income Streams | Reduce reliance on any single source | Medium |
Tip 1: Reassess Your Retirement Timeline Honestly
Turning 60 is the ideal moment to revisit not just how much you have saved, but when you actually intend to retire — and whether those two numbers align. Many people carry a vague aspiration to retire at 65 without ever calculating whether their savings, pension income, and investment portfolio will actually support their desired lifestyle for twenty or thirty years beyond that date.The first step is calculating your projected retirement income from all sources: workplace pensions, personal pension or 401(k) balances, expected Social Security or State Pension payments, rental income, investment dividends, and any other income streams. Then compare that total against your projected retirement expenses, including housing costs, healthcare, travel, entertainment, and the often-underestimated costs of a long and active retirement.
- Key action: Use the Social Security Administration's online retirement estimator or the UK government's State Pension forecast tool to get a precise projection of your government benefit at different retirement ages. Even a two-year delay in claiming can dramatically increase your lifetime benefit.
Tip 2: Eliminate All Remaining Debt Before Retirement
Entering retirement carrying significant debt is one of the greatest risks to financial security in later life. Fixed income — which is the reality for most retirees — makes debt servicing far more burdensome than it feels during working years when income can grow. The goal entering your 60s should be to develop and execute a concrete plan to be entirely debt-free by the time you retire.Prioritise high-interest consumer debt first: credit cards, personal loans, and car finance. These carry the highest cost and provide no asset value. Once consumer debt is eliminated, focus on the mortgage. While some financial advisors suggest that low-rate mortgage debt is acceptable in retirement if investment returns exceed the mortgage rate, the psychological and cash-flow benefits of owning your home outright — a guaranteed, risk-free reduction in monthly expenses — are significant and should not be underestimated.
Key action: Calculate your total debt payoff timeline using the avalanche method (highest interest rate first). For every pound or dollar of debt eliminated before retirement, you reduce the monthly income your portfolio must generate by the equivalent debt service amount — permanently improving your retirement cash flow position.
In the UK, this is also the moment to consider overpaying your mortgage strategically — many mortgage agreements allow overpayments of up to 10% of the outstanding balance per year without penalty. In the US, making additional principal payments on a 30-year mortgage in your early 60s can eliminate it years ahead of schedule.
Tip 3: Maximise Catch-Up Contributions
One of the most valuable and underutilised financial tools available to people aged 50 and over is the catch-up contribution — an additional allowance above the standard annual limit for retirement account contributions. This provision was specifically designed to allow late starters, or those who want to accelerate savings in their final working years, to boost retirement accounts significantly.Catch-Up Contribution Limits (2024)
- 401(k) plans (US): Standard limit of $23,000 per year, plus a catch-up contribution of $7,500 for those aged 50 and over — allowing total contributions of $30,500 annually.
- IRA (US): Standard limit of $7,000 per year, plus a $1,000 catch-up contribution for those aged 50 and over — allowing $8,000 annually in tax-advantaged savings.
- SECURE 2.0 Act enhancement: From 2025, individuals aged 60 to 63 can make even higher catch-up contributions of $11,250 to 401(k) plans — a significant additional opportunity for those in this specific age window.
- UK pension contributions: Annual allowance of up to £60,000 (or 100% of earnings, whichever is lower), with carry-forward provisions allowing unused allowances from the previous three tax years to be utilised — potentially enabling contributions well above the standard annual limit.
Key action: If you are not already maximising your catch-up contributions, calculate the additional amount you could contribute each month and automate the increase immediately. Five years of maximum catch-up contributions can add $150,000 or more to a US retirement account before tax-deferred growth is applied.
Tip 4: Develop a Strategic Social Security or State Pension Plan
The decision of when to claim Social Security in the US — or when to access your State Pension in the UK — is one of the most consequential financial decisions you will make in your 60s. The timing of this decision can mean a difference of hundreds of thousands of dollars or pounds over the course of a long retirement.In the United States, you can begin claiming Social Security as early as age 62, but your benefit is permanently reduced by up to 30% compared to your full retirement age (FRA) benefit if you claim early. Conversely, delaying beyond your FRA — up to age 70 — increases your monthly benefit by 8% for each year you delay. For someone with a full retirement age benefit of $2,000 per month, delaying from 62 to 70 transforms a $1,400 monthly payment into approximately $2,640 — an 89% increase.
Key insight: For healthy individuals who expect to live into their 80s, delaying Social Security typically results in significantly higher lifetime benefits. The breakeven point for delay versus early claiming is generally around age 80 to 82. Those with serious health concerns or who lack bridge income may benefit from earlier claiming.
In the UK, the new State Pension is currently worth up to £221.20 per week (2024/25) for those with 35 qualifying National Insurance years. Deferring State Pension increases it by approximately 1% for every nine weeks deferred — equivalent to just under 5.8% per year. Checking your National Insurance record via the HMRC website and identifying any gaps that can be voluntarily filled is an essential action for every UK resident approaching 60.
Tip 5: Rebalance Your Investment Portfolio for the Next Phase
The investment strategy appropriate for a 40-year-old is not appropriate for a 60-year-old — and failing to adjust your portfolio allocation as you approach retirement is one of the most common and costly mistakes in personal finance. The transition from the accumulation phase (growing wealth) to the preservation and distribution phase (protecting and drawing down wealth) requires a fundamental rethinking of risk tolerance, time horizon, and asset allocation.The traditional guidance was to subtract your age from 100 to determine your equity allocation — so a 60-year-old would hold 40% equities and 60% bonds. Modern financial planning has revised this upward given longer lifespans and low bond yields, with many advisors suggesting a 60/40 or even 70/30 equity-to-bond split at age 60 for those in good health with a 25 to 30-year retirement horizon.
What matters most is not a specific formula but a deliberate, personalised review of your current allocation against your risk tolerance and retirement timeline. Key rebalancing considerations include:
- Reduce concentration in any single stock, sector, or employer shares that may have built up over decades of employment.
- Introduce inflation-protected assets such as Treasury Inflation-Protected Securities (TIPS) in the US or index-linked gilts in the UK, which preserve purchasing power against rising prices.
- Consider the bucket strategy — dividing retirement assets into three time-based buckets (short-term: cash; medium-term: bonds; long-term: equities) so that near-term income needs are not at the mercy of stock market volatility.
- Review investment fees ruthlessly. Switching from actively managed funds charging 1.5% annually to low-cost index funds charging 0.1% to 0.2% can save tens of thousands of pounds or dollars over a twenty-year retirement.
Tip 6: Plan Seriously for Healthcare Costs
Healthcare is consistently identified as the largest and most unpredictable expense in retirement — yet it is the cost that most pre-retirees systematically underestimate. Fidelity's 2023 estimate suggests that a 65-year-old couple in the United States will need approximately $315,000 in today's dollars to cover healthcare costs in retirement, excluding long-term care. In the UK, while the NHS provides universal healthcare, social care costs — for assisted living, domiciliary care, or residential care homes — are not covered and can be catastrophic for retirement savings.Key insight: In the US, if you retire before age 65 — before Medicare eligibility — bridging private health insurance is one of the most significant financial challenges. Premiums for a 62-year-old on the marketplace can exceed $1,000 per month. Planning specifically for this bridge period is essential for anyone considering early retirement.
Proactive healthcare financial planning at 60 includes:
- Health Savings Account (HSA) maximisation (US only): If you are covered by a high-deductible health plan, an HSA is the most tax-efficient savings vehicle available — contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. After age 65, HSA funds can be withdrawn for any purpose (with income tax only, like a traditional IRA). Maximise contributions while you are still working.
- Long-term care insurance: The earlier you purchase a long-term care insurance policy, the lower the premiums. Age 60 is often cited as the optimal purchase window — late enough that you likely will not need the coverage soon, but early enough that premiums remain manageable and health conditions have not yet made you uninsurable.
- Review and optimise NHS pension contributions and benefits (UK): For UK public sector workers, defined benefit NHS, teacher, or civil service pensions provide index-linked income for life and may also include survivor and ill-health benefits that make private healthcare planning less critical.
Tip 7: Create or Comprehensively Update Your Estate Plan
Estate planning is one of the most frequently postponed financial tasks — and one of the most consequential to leave incomplete. At 60, with retirement approaching and assets at or near their lifetime peak, having a current, comprehensive estate plan in place is not optional. It is an act of responsibility to yourself and to everyone who depends on you.A complete estate plan at 60 should include:
- A valid, up-to-date Will: If you do not have a Will, your assets will be distributed according to your jurisdiction's intestacy rules — which may not reflect your wishes. If you do have a Will, review it for changes in your family circumstances, relationships, or asset base since it was last written.
- Lasting Power of Attorney (UK) / Durable Power of Attorney (US): Legal documents that designate trusted individuals to manage your financial and healthcare decisions if you lose capacity. Without these in place, families must go through an expensive and time-consuming court process to obtain guardianship.
- Beneficiary designations: Review all beneficiary designations on pension accounts, life insurance policies, and investment accounts. These designations override your Will and are often overlooked after divorce, remarriage, or bereavement.
- Inheritance tax planning (UK): The current nil-rate band is £325,000 per person (£650,000 per couple), with a residence nil-rate band of £175,000 if you leave your home to direct descendants. Gifts from surplus income, annual gift allowances, and trust structures can all reduce eventual inheritance tax liability — but must be planned well in advance to be effective.
- Estate tax planning (US): The federal estate tax exemption is currently $13.61 million (2024) but is scheduled to revert to approximately $7 million in 2026. For high-net-worth individuals, acting before this change is urgent.
Tip 8: Build Multiple Streams of Retirement Income
One of the defining principles of financial resilience in retirement is income diversification. Retirees who depend entirely on a single income source — whether that is a pension, Social Security, or investment drawdown — are exposed to the full impact of any disruption to that source. Building multiple income streams before and during retirement creates a more stable, flexible, and resilient financial foundation.The most robust retirement income frameworks combine three or more of the following sources:
- State or government pension: A guaranteed, index-linked income for life that forms the non-negotiable foundation of most retirement income plans.
- Workplace or personal pension drawdown: Regular income drawn from accumulated pension savings, invested to continue growing while distributions are made.
- Annuity income: Converting a portion of pension savings into a guaranteed annuity provides certainty and protection against longevity risk — the risk of outliving your money. At current annuity rates, annuities deserve serious consideration for those seeking income certainty.
- Rental income: Property ownership — whether a buy-to-let in the UK or rental property in the US — provides inflation-linked income that does not depend on market performance.
- Dividend income from investments: A portfolio weighted toward dividend-paying equities and investment trusts can generate consistent quarterly or monthly income without requiring the sale of underlying assets.
- Part-time or consultancy work: Many professionals in their 60s choose a phased retirement — reducing hours rather than stopping entirely. Even modest part-time income significantly reduces the drawdown rate on investment portfolios, extending their longevity dramatically.
Key principle: The more independent and uncorrelated your income streams, the more resilient your retirement finances become. When markets fall, rental income continues. When rental properties have vacancies, dividends continue. When dividends are cut, the State Pension continues. Diversity is the foundation of financial security.
Conclusion
Turning 60 is not a financial deadline — it is a financial invitation. An invitation to review where you stand, to take deliberate action in the years that remain before retirement, and to design the later chapters of your financial life with the same intention and strategy that you would apply to any other important project.The eight tips in this guide — reassessing your retirement timeline, eliminating debt, maximising catch-up contributions, planning Social Security or State Pension timing, rebalancing your portfolio, preparing for healthcare costs, updating your estate plan, and building multiple income streams — are not isolated actions. They form an interconnected financial framework. Addressing all eight systematically, even over a two to three year period, creates a retirement position that is fundamentally more secure than acting on any single tip in isolation.
The professionals who can help you implement these tips — independent financial advisers, certified financial planners, estate solicitors, and tax specialists — are valuable partners in this process. For decisions as consequential as retirement income sequencing, Social Security timing, and inheritance tax planning, the cost of professional advice is almost always recovered many times over in better outcomes. Begin with one tip, take one action this week, and build from there. Your 70-year-old self will reflect on the choices made at 60 as some of the most important financial decisions of your life.
Frequently Asked Questions (FAQ)
Is 60 too late to significantly improve my retirement finances?
Absolutely not. The years between 60 and 65 are among the most financially productive years of your life for retirement preparation. Income is typically at its peak, children are often financially independent, and the government provides specific catch-up contribution incentives for this age group. Five years of focused financial action — eliminating debt, maximising contributions, and optimising income timing — can transform your retirement position significantly. Starting now is always better than starting later.How much should I have saved by age 60?
A common rule of thumb from retirement planning research is to have saved approximately eight to ten times your current annual salary by age 60. However, this figure varies enormously based on your expected retirement lifestyle, other income sources such as pensions and Social Security, housing costs, and health. The most meaningful benchmark is not a universal multiple but a personalised calculation of whether your projected income from all sources will cover your projected expenses throughout retirement. A qualified financial planner can model this precisely for your individual circumstances.Should I pay off my mortgage or invest the money instead?
This is one of the most debated questions in personal finance for people in their 60s. The mathematical answer depends on whether your after-tax investment return exceeds your mortgage interest rate. However, the holistic answer weighs in several additional factors: the psychological security of owning your home outright entering retirement, the reduction in required monthly retirement income when there is no mortgage payment, and the reduced risk exposure at a stage of life when market volatility becomes more consequential. For most people approaching retirement, eliminating the mortgage provides a combination of financial and psychological benefits that justify prioritising it alongside continued investment contributions.When is the best time to start drawing my pension?
In the UK, you can currently access most private pensions from age 55 (rising to 57 in 2028). The decision of when to draw should be based on your income needs, tax position, other income sources, and life expectancy. Drawing pension income when you do not need it, or when it would push you into a higher tax bracket, is often suboptimal. Many advisers recommend a phased approach — drawing modestly from pension savings while continuing to receive employment income, then increasing drawdown at full retirement. In the US, Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s must begin at age 73, but voluntary drawdown can begin at 59.5 without early withdrawal penalties.Do I need a financial adviser at 60?
For straightforward financial situations, well-informed individuals can implement many of these tips independently using the excellent free resources available from government agencies, regulated charities, and reputable personal finance platforms. However, for those with complex situations — significant pension assets, multiple income sources, inheritance tax exposure, defined benefit pension decisions, or business interests — the guidance of a qualified independent financial adviser or certified financial planner is strongly recommended. The cost of professional advice in the context of decisions worth hundreds of thousands of pounds or dollars is almost always justified by the improvement in outcomes it delivers.
External References
The following authoritative sources informed this guide and are recommended for further reading and planning:1. Social Security Administration (US) — Retirement Benefits and Timing Calculator
https://www.ssa.gov/benefits/retirement/
2. UK Government — Check Your State Pension Forecast
https://www.gov.uk/check-state-pension
3. HMRC (UK) — Check Your National Insurance Record
https://www.gov.uk/check-national-insurance-record
4. Fidelity Investments — How Much to Save for Healthcare in Retirement
https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
5. MoneyHelper (UK) — Pension Planning and Retirement Guidance
https://www.moneyhelper.org.uk/en/pensions-and-retirement
6. IRS (US) — Retirement Topics: Catch-Up Contributions
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions
7. Citizens Advice (UK) — Wills, Power of Attorney and Estate Planning
https://www.citizensadvice.org.uk/family/death-and-wills/
8. Vanguard — How to Create a Retirement Income Strategy
https://investor.vanguard.com/investor-resources-education/retirement/how-to-create-a-retirement-income-strategy
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