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:
Find 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.
Know your full retirement age
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 stop working before retirement age, 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 social security retirement benefit will go up by 5.5% to 8% for every year you wait. Delayed retirement credits apply until you reach age 70.
If you’re getting benefits while working, your earnings can affect Social Security benefits. 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.
Contribute to an IRA
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 IRA 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.
Know when to withdraw 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, 401(k) distributions 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.
Handle your finances during a divorce
The divorce rate for people between the ages of 48 and 66 has increased by more than 50 percent since 1992, according to U.S. Census data. Handling the financial aspects of a divorce appropriately helps to reduce some of the emotional toll.
Divorce laws differ in each state, from requirements pertaining to grounds for divorce, waiting periods and residency requirements, as well as decisions about property division and spousal support. Financial experts advise that couples should talk about personal finances at the beginning of the divorce process and include the following:
The liquidity of your collective assets
Know which funds are available to you if you need to access cash quickly. Take an inventory of your assets and note which ones are liquid, such as bank accounts, mortgages and tax refunds.
Know about the tax ramifications and early withdrawal penalties associated with retirement accounts, since these may be considered shared assets.
Your credit history and shared debt
Get a copy of your credit report to identify joint accounts and potential credit issues. It’s usually wise to close all joint accounts prior to your divorce settlement and to open your own separate accounts.
The specifics of your insurance policy
If your insurance policy is in both names, you should buy your own policy in your name and know whether you are the irrevocable beneficiary of any other policy.
By getting a grip on your finances and following sound financial advice, you can put yourself in a great place for the future.