Financial Planning in Your 60s

The Shift from Accumulation to Distribution

Your entire financial life up to this point has been about accumulating assets. Now the calculus changes: the goal is making those assets last 25–30+ years, minimizing taxes on withdrawals, and not running out before you run out of life.

The biggest mistake people make in their 60s is treating retirement planning like they're still in accumulation mode. The decisions now are fundamentally different — and the stakes of getting them wrong are too.

Social Security: The Most Important Timing Decision

You can claim Social Security as early as 62 or as late as 70. Every year you wait increases your benefit: roughly 6.67% per year from 62 to full retirement age (67 for most people), and 8% per year from 67 to 70.

The break-even math: claiming at 70 vs. 62 requires you to live past about age 80 to come out ahead on total lifetime benefits. If you're in good health and have other income sources to bridge the gap, delaying to 70 is often the right move — especially for the higher-earning spouse in a couple.

Spousal benefits and survivor benefits add more complexity — a married couple has multiple claiming combinations to optimize.

Medicare: Don't Miss Your Enrollment Window

Medicare enrollment starts 3 months before your 65th birthday. Miss this window and you face permanent premium penalties: 10% more per year late for Part B, and 1% per month late for Part D.

The Medicare maze: Part A (hospital, usually free), Part B (medical, ~$185/mo in 2025 for most), Part D (prescriptions), and either a Medigap supplement or Medicare Advantage plan. The total cost depends heavily on your health needs and location.

High earners pay IRMAA surcharges on Parts B and D. At $106,001–$133,000 (single) or $212,001–$266,000 (married), your Part B premium jumps from $185 to $259/month. Plan income carefully in the years before Medicare to avoid triggering higher brackets.

Required Minimum Distributions (RMDs)

Traditional IRA and 401(k) accounts have required minimum distributions starting at age 73 (as of SECURE Act 2.0). The IRS forces you to withdraw a percentage of your account balance each year — and pay ordinary income tax on it.

RMDs can push you into higher tax brackets, increase your Medicare premiums (IRMAA), and make more of your Social Security taxable. The solution: Roth conversions in your early 60s before RMDs start, reducing the balance of tax-deferred accounts while you're in a relatively low bracket.

Roth IRAs have no RMDs. If you have significant traditional IRA balances, converting strategically over several years in your 60s can substantially reduce lifetime taxes.

Withdrawal Order: Sequence Matters

The conventional wisdom on withdrawal order: (1) taxable accounts first, (2) tax-deferred (traditional IRA/401k), (3) tax-free (Roth). But this isn't always optimal.

For most retirees, a mixed withdrawal strategy that keeps income in lower tax brackets throughout retirement beats a rigid sequence. This often means drawing down traditional accounts before RMDs force large distributions later, while letting Roth accounts grow tax-free as long as possible.

Estate Planning: Non-Negotiable

If you don't have an estate plan in your 60s, you're not just failing yourself — you're creating a burden for your family. At minimum: a will, durable power of attorney, healthcare proxy/advance directive, and beneficiary designations on all accounts.

Note: assets with named beneficiaries (retirement accounts, life insurance, joint accounts) pass outside probate. Your will doesn't control them. Update beneficiaries separately after every major life event — divorce, death, birth of grandchildren.

Your 60s Financial Checklist

Calculators for Your 60s