Life is tough when everything seems to fall apart. A divorce, a death, a job that was a sure thing suddenly disappearing. It’s even tougher when you’re close to retirement. Give yourself a short amount of time to dwell in that pain, and then move on.
Easier said than done, of course. But focusing on loss prevents you from moving forward financially and emotionally. Accepting that things have changed isn’t easy, but it’s necessary for making a fresh start.
Here are some ways to take control of your life and start over after age 60:
1. Get a job
If you lost your job or are experiencing financial problems, you’ll need a job. It doesn’t have to be your dream job. It doesn’t have to be the type of job you used to have, one with a corner office or dozens of minions reporting to you. Find a job that pays a livable wage so you can get back on your feet and regroup. You can always switch jobs later, when you find something more in line with your interests and abilities.
If you need to update your skills by learning new technologies, find a class after work hours, or ask someone to tutor you. By maintaining a good attitude and initiative to learn, employers will be more interested in hiring and promoting you.
2. Know your Social Security info
Social Security allows you to start receiving benefits at age 62, but financially you’re better off waiting until the year the federal government has designated as the “full retirement age,” when you‘re eligible for maximum financial benefits. Depending on your birth year, the full retirement age is between 65 and 67.
If you elect to get benefits early, the monthly amount of money you receive will decrease for every year before the official retirement date. If you elect to start getting your Social Security payments after your full retirement age, on the other hand, your benefit will go up by 5.5% to 8% for every year you wait. That applies until you reach age 70.
Your Social Security earnings can also be affected by income received through current work. If you’re relying on spousal benefits, be sure to get advice on how and when to begin taking payments, and how working affects that.
3. Adding to retirement accounts
Hopefully, you have a retirement account that’s well funded. If not, there’s still time to contribute to your future retirement. The IRS allows those over age 50 to make additional contributions to their accounts.
In 2019, for example, those 50+ can add $7,000 yearly to a traditional or Roth IRA, a thousand dollars more than those 49 and younger. You can continue adding to a traditional IRA account until you’re 70.5. You can add to a Roth IRA or make rollover contributions to both traditional and Roth IRA accounts at any age.
4. Withdrawing from retirement accounts
Retirement plans have different rules for when funds can be withdrawn, some with penalties if withdrawn too soon. The advantage to retirement accounts is compounded growth, with the money available in tax-advantaged ways when you retire. Talk with a financial advisor if you’re considering withdrawing money from your retirement account to make sure you know the advantages and disadvantages.
In general, funds from 401k plans aren’t available for withdrawal before age 59.5 unless there’s a financial hardship. Some funds must be withdrawn starting by age 70.5, even if you’re still working. Traditional and Roth IRA distributions have different requirements.
Starting over after a later-in-life roadblock is difficult. But it doesn’t have to be a showstopper. By getting a grip on your finances and following sound financial advice, you can put yourself in a great place for the future.