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Retirement Simplified is the leading Retirement Financial Wellness solution for credit unions. We provide patent-pending financial tools, including our exclusive Retirement Score, along with timely education that reflects the latest changes in Social Security, Medicare, Retirement Savings Accounts, and more.

Retirement All In One Place

You&rsquo;ve reached your 50s. But are you in good shape to retire? Here&rsquo;s a look at how you compare to others your age, along with helpful information to help you plan an early exit from the workplace.

About This Class

Retiring while in your fifties not only takes a lot of money, it takes a lot of planning. With an average life expectancy of 83 years for men and 86 years for women, you still have about 40% of your life ahead of you.1&nbsp;
Think about it from a financial perspective. Retiring at 50 rather than 62 causes you to lose 12 years of income. That&rsquo;s the obvious part of the equation. But there&rsquo;s another piece of the puzzle: you&rsquo;ll also be tapping into your savings 12 years earlier. That means you could potentially be losing out on 18 to 24 years worth of savings if you retire in your 50s.&nbsp;
Only about 5% of Americans expect to retire in their early 50s, and another 11% are aiming to exit the workforce between 55 and 59.2 Either way, there are several major considerations you&rsquo;ll want to keep in mind before taking the plunge. In this retirement course, specially designed for you if you&rsquo;re hoping to retire between ages 50 and 59, you&rsquo;ll learn everything you need to know about what&rsquo;s considered &ldquo;early retirement.&rdquo; We&rsquo;ll take you through how to obtain health coverage before Medicare, discuss how to live comfortably before Social Security sets in and much more.&nbsp;
<h3>What You&rsquo;ll Learn in this Class:&nbsp;</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">What to do before you retire. Don&rsquo;t wait until those post-paycheck years to consider these key elements!&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Healthcare. How to handle it and what your options look like.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Investments. Have you saved enough to support an early retirement?&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Benefits. Social Security is still a long way off; here&rsquo;s how to maximize any benefits you may have before that.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Taxes. One of the most confusing aspects of retirement. Here&rsquo;s what you need to know.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Checklist. Are you really ready for retirement?&nbsp;</li>
</ul>

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Xu JQ, Murphy SL, Kochanek KD, Arias E. &ldquo;Mortality in the United States, 2018.&rdquo; CDC, 30 January 2020, https://www.cdc.gov/nchs/products/databriefs/db355.htm. Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Fewer Than 50 Percent of Americans Think They Will Retire in Their 60s.&rdquo; Nasdaq, 1 July 2017, https://www.nasdaq.com/articles/fewer-50-percent-americans-think-they-will-retire-their-60s-2017-06-01. Accessed 30 July 2021.</li>
</ol>

Figuring out how much to save based on when you plan to retire can be tricky. A question you might ask yourself is, &ldquo;Will I need to sacrifice my quality of life in order to retire early?&rdquo; One of the best ways to find the answer is to understand how much you need to save to continue your spending habits.&nbsp;
&nbsp;A successful way to plan your early retirement is through the use of Silvur&rsquo;s Retirement Score. Our Retirement Score shows you how long your savings are projected to last based on how much you&rsquo;ve saved, along with other factors like when you plan to retire and at what age you&rsquo;ll begin taking Social Security benefits. Below, we&rsquo;ll go through an example on how budgeting and spending can put a dent in your savings if you don&rsquo;t plan accurately.&nbsp;
Example
In this example, Ellen has saved $500,000 and intends to live on a budget of $3,000 per month in retirement. She is currently making $60,000 along with her husband, Bob. Ellen and Bob are the same age, they plan to retire by age 55 and elect their Social Security benefits at age 62.&nbsp;
Based on their $500,000 in savings, they can afford to spend $3,000 a month to make sure their savings last longer than their lifetime with a Retirement Score of 103 years and 5 months.&nbsp;
However, if Ellen and Bob spent lavishly at $7,000 a month, they would burn through their savings to age 65 &frac12;. At that spending level, there&rsquo;s a chance that not even a $1,500,000 nest egg would last, with our Retirement Score showing the money running out by age 85 &frac12;.&nbsp;
Now, let&rsquo;s suppose Ellen and Bob have saved $1,500,000 for retirement. By sticking to a budget of $3,000 per month, their money would last through the entirety of their retirement and then some; they&rsquo;d be able to pass money down to future generations according to their Retirement Score of 135+. And if leaving an inheritance isn&rsquo;t a priority, Ellen and Bob could live a bit more lavishly, spending up to $6,000 per month without much likelihood of running out of money (according to their Retirement Score of 98.3).
<img src="https://cdn.buttercms.com/rFOkZLpGSWWbZDp4BNfV" alt="undefined" />

Note: We assume that Ellen and Bob are calculating their Retirement Score at age 55. The maximum Retirement Score for a 55 year old is 135 years.&nbsp;
<h2>What You Can Do Now</h2>
Wondering where you stand? Start by getting your custom Retirement Score.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">In Silvur, set your retirement age to the age you&rsquo;d like to retire to see how that changes your Retirement Score.</li>
<li style="font-weight: 400;" aria-level="1">Review your elections, retirement accounts, and expenses to determine your Silvur Retirement Score. That will give you a more accurate sense of whether you have saved enough to retire.</li>
</ul>

Part of planning for an early retirement involves taking a few crucial steps while you&rsquo;re still working. Let&rsquo;s take a look at some of them below.&nbsp;
<h2>1. Draw Up a Workable Budget</h2>
Perhaps more important than any other step you&rsquo;ll take (and applicable at any age, by the way!) is coming up with an all-encompassing budget for your household. Doing so will force you to look at how much you&rsquo;re (really!) spending, where your money is going and where you can make cuts.&nbsp;
Another consideration? Nail down your current monthly budget, then figure out what you think your monthly budget will look like once you&rsquo;re in retirement. You&rsquo;ll find subtle differences, like less money spent on gas, clothing and lunches out, but other expenses might actually increase in retirement (ahem - healthcare). Since you&rsquo;ll be living without a paycheck in retirement, and for many years without even the assistance of Social Security benefits, it&rsquo;s crucial to have a firm grasp on exactly how much money you&rsquo;ll need to live on a month-to-month basis.&nbsp;
Based on the previous lesson, &ldquo;How Long Your Savings Will Last By Budget,&rdquo; we show you how much you could afford to spend a month based on your net worth. However, your spending should account for monthly healthcare premiums, cost-of-living expenses, and any other taxes you&rsquo;ll incur now and throughout retirement.&nbsp;
<h2>2. Maximize Contributions to Retirement Accounts</h2>
Especially if you&rsquo;re planning to retire in your fifties, you&rsquo;ll need to have contributed the maximum amount possible to your retirement accounts over the course of your working years. You&rsquo;ll lose out on a great deal of earning power if you exit the workforce this early, so it&rsquo;s crucial to plan accordingly. Current contribution limits for 401k accounts are $22,500 and for IRAs, the limit is $6,500.
<h2>3. Make Catch-Up Contributions</h2>
Part of what you&rsquo;ll miss out on by retiring in your fifties is catch-up contributions. Starting at the age of 50, you&rsquo;re eligible to contribute more to your retirement accounts, like your 401k and IRAs. IRA accounts are pretty strict when it comes to catch-up contributions: you can only contribute an additional $1,000 above the $6,500 limit. But you can add an additional $7,500 as a catch-up contribution to your 401(k) if you&rsquo;re over 50. If you plan to retire in the next few years, max out your IRA and 401(k) catch-up contributions. This could mean another $42,500 in five years, and that doesn't even take compounding interest into account!
<h2>4. Review Long-Term Care and Life Insurance</h2>
Proper insurance is another way to further protect your finances if you&rsquo;ll be retiring before your earning years are over. While you&rsquo;re still working, it&rsquo;s a good time to ensure you&rsquo;re covered with all the insurance you might need during retirement. We&rsquo;ll touch more on this later in our lesson called, &ldquo;Long-Term Care and Life Insurance.&rdquo;&nbsp;
<h2>5. Refinance or Downsize Your Home</h2>
This isn&rsquo;t a step you&rsquo;ll want to save for after retirement, when it&rsquo;ll be harder to secure a good loan without a steady paycheck. So if you know you&rsquo;ll save a great deal of money every month by refinancing your home, or if you&rsquo;re planning on purchasing a much smaller dwelling to live out your retirement period, it&rsquo;s best to tackle this before you retire.&nbsp;
<h2>6. Fully Fund Your HSA</h2>
A well-funded HSA can be a huge help for anyone, but that&rsquo;s particularly the case if you&rsquo;re hoping to retire long before Medicare kicks in. All healthcare options for retirees who don&rsquo;t yet qualify for Medicare are expensive; there&rsquo;s no way around that (see Lesson &ldquo;Early Retirement Healthcare Option&rdquo; for a breakdown), and an HSA allows you to withdraw the money you&rsquo;ve saved to use on qualified medical expenses at any age.&nbsp;
You&rsquo;ll pay more out of pocket for an HSA, but your working years are the best time to do this, since it&rsquo;s easier to shoulder while you&rsquo;re working rather than after you retire. You&rsquo;ll end up with an HSA that can double as an investment vehicle once you turn 65. What&rsquo;s more, you can continue to fund your existing HSA even during retirement (until you enroll in Medicare, that is). To learn more about HSAs, see our class &ldquo;<a href="https://www.silvur.com/retirement-school/hsa-for-early-retirement-healthcare" rel="follow noopener" target="_blank">Health Spending Accounts (HSA)</a>.&rdquo;
<h2>7. Review Portfolio Allocation</h2>
One thing you may wonder about as you approach retirement is whether your money is invested properly. Do you have the right mix of aggressive and conservative investments? It&rsquo;s only natural to want to &ldquo;de-risk&rdquo; your portfolio as retirement approaches. But remember, if you&rsquo;ll be retiring in your fifties, you&rsquo;ve still got to account for three to four decades of inflation. So you want a mix of assets that allow mostly for safe growth, with a portion of more aggressive funds that can help protect your earnings and keep your future income similar to today&rsquo;s.&nbsp;
To determine the best asset allocation, first consider your budget: where do you stand as you approach your retirement years? Are your finances lacking anything, or do you have more than enough to make it through? In considering these questions, be sure to include all of your income streams for accuracy.&nbsp;
Once you understand how much you need to rely on your portfolio to cover your spending, then you can determine how much risk you want to take in your portfolio. If you&rsquo;ll be relying heavily on your investments for daily living in retirement, it&rsquo;s important to avoid too much risk and keep&nbsp; most of your money in more conservative investments, like the one shown below.&nbsp;
But if you&rsquo;re in your fifties with many years of retirement left and plenty of money saved, and you&rsquo;re not yet relying on your investments to cover expenses, it&rsquo;s perfectly okay to keep a larger portion of your investments in aggressive funds.&nbsp;
<h2>8. Build an Emergency Fund</h2>
If you don&rsquo;t already have one, a stash of liquid assets like cash at the ready is always a good thing to have before you retire. But in this case, more truly is better. Make it a goal to save six to twelve months of expenses if possible.

Whether you are married, single, divorced or widowed can impact your retirement in myriad ways. Consider how your marital status could affect your plans, as well as steps you can take to improve your situation regardless.
<h2>Married Couples</h2>
Married couples face advantages and disadvantages when it comes to retirement. With two people retiring together, you&rsquo;ll need twice as much cash to cover daily living expenses like food, utility bills and healthcare. Also, decisions you make in retirement as an individual in a marriage can adversely affect the other person.&nbsp;
However, having another person to lean on can be immensely helpful since you can make decisions together and take care of one another. Married couples can also choose to have one or both partners continue working part-time to increase retirement income or delay withdrawals from investment accounts.
In addition, there are other strategies for married couples when it comes to Social Security and Medicare. For example, Social Security election age is important especially if one relies on the other&rsquo;s benefits. Typically, females live longer than males so if one elects too early, this might end up hurting the other spouse&rsquo;s spending in the future. You can learn more strategies in our class &ldquo;<a href="https://www.silvur.com/retirement-school/social-security-for-married-couples" rel="follow noopener" target="_blank">Social Security Benefits for Married Couples.</a>&rdquo;&nbsp;
For spouses who have a large age gap, you can potentially save money on healthcare costs by enrolling into your younger working spouse&rsquo;s healthcare plan even if you&rsquo;re eligible for Medicare. But there are rules to know if you plan to delay your enrollment which you can learn more in our &ldquo;<a href="https://www.silvur.com/retirement-school/medicare-101" rel="follow noopener" target="_blank">Medicare 101</a>&rdquo; class. 
<h2>Singles</h2>
Being single in retirement can be immensely beneficial in some ways. For example, you can opt for a smaller living space, and you only need to have enough assets to pay for monthly expenses for yourself. However, being single in retirement can also mean paying for regular living expenses entirely on your own, and having to make an array of important decisions all by yourself.&nbsp;
To best assess your finances and Social Security benefits, you need to factor in your longevity. If you plan to live a long life, it might not be wise to collect benefits early at a reduced rate. It might make more sense to build up your savings to carry you over while you delay your Social Security election age to increase your benefits. For a more detailed explanation on when to elect benefits, you can read our class &ldquo;<a href="https://www.silvur.com/retirement-school/social-security-benefits-for-singles" rel="follow noopener" target="_blank">Social Security Benefits for Singles.</a>&rdquo; 
One great option to lessen the burden of retirement is to find a roommate you trust and get along with. It&rsquo;s a great way to help each other out, reduce bills like food and utilities, and have company when you want it as well.&nbsp;
<h2>Divorced or Widowed&nbsp;</h2>
Being divorced or widowed can leave you in a similar position in retirement as if you were initially single. However, you're more likely to have access to remaining benefits such as a pension or spousal Social Security benefits. Make sure you have a plan to maximize any spousal benefits currently being paid out to you, as well as those you expect to receive in the future. If you&rsquo;re a widow or widower, you can draw survivor benefits as early as age sixty without affecting your own benefits, and while you&rsquo;re still gainfully employed. This is key, since it allows you to keep working and building both your nest egg and your own Social Security benefits which you can learn more about in our class &ldquo;<a href="https://www.silvur.com/retirement-school/social-security-benefits-for-widows" rel="follow noopener" target="_blank">Social Security Benefits for Widow(er)s.</a>&rdquo;&nbsp;
Benefits work a bit differently for divorced spouses, though. If you were married for more than 10 years and you&rsquo;re now divorced, you&rsquo;re entitled to 50% of your ex-spouse&rsquo;s Social Security benefit amount. If your own Social Security benefits are higher, though, you&rsquo;ll automatically receive that higher amount and your ex-spouse&rsquo;s benefits won&rsquo;t come into play. Do keep in mind though, if you are receiving spousal benefits, you can only get the maximum benefit amount when you hit Full Retirement Age. Filing before that will reduce the benefits you&rsquo;re entitled to. Understand what the rules are to maximize your ex-spousal benefits at &ldquo;<a href="https://www.silvur.com/retirement-school/divorced-social-security-benefits" rel="follow noopener" target="_blank">Social Security Benefits for Divorced Couples.</a>&rdquo; 
Finally, for widowed or divorced members, remember that these are both considered qualifying life events for the purpose of healthcare enrollment. So be sure to use that to your advantage if you still need to sign up.

Retiring from the workforce just as you enter your fifth decade of life means you still have ten to fifteen years until you&rsquo;re eligible for Medicare. That means you&rsquo;ll likely spend hundreds of thousands of dollars funding your own health coverage in the ensuing years.&nbsp;
A 65-year old, couple retiring this year can expect to spend $315,000 in health care and medical expenses throughout retirement. For single retirees, the 2022 estimate is $165,000 for women and $150,000 for men.1
So no matter how tempting it may be to tell your boss goodbye, first be sure you can shoulder the heavy burden that healthcare can be. That&rsquo;s money you could use during retirement, and this is no time to run out! For more information on healthcare in early retirement, be sure to check out our course entitled &ldquo;<a href="https://www.silvur.com/retirement-school/early-retirement-healthcare-101" rel="follow noopener" target="_blank">Early Retirement Healthcare 101.</a>&rdquo;
In the meantime, here are some of the options you have if you decide to retire before you&rsquo;re eligible for Medicare.&nbsp;
<h2>Spouse&rsquo;s Insurance</h2>
The easiest and most cost-effective way to get health insurance in early retirement is to be added on to your spouse&rsquo;s company insurance plan.&nbsp;&nbsp;
<h2>Employer-Sponsored Health Insurance</h2>
Though this valuable benefit has seen a steady decline in recent decades, some large companies (over 200 employees) do still offer health benefits to retirees. It&rsquo;s estimated that only about 30% of companies offer these types of plans anymore, but if yours does, this could be a great way to continue your coverage until Medicare kicks in. These plans are often your least expensive option, and the best news is that it&rsquo;s likely to be insurance you&rsquo;re familiar with.2
<h2>COBRA</h2>
COBRA provides 18 months of coverage under your current employer&rsquo;s plan, but there are two major drawbacks for you to consider if you&rsquo;re hoping to retire in your fifties.
<ul>
<li style="font-weight: 400;" aria-level="1">You&rsquo;ll shoulder the full cost of the premium (where before it was shared with your employer); COBRA coverage is good, but it is one of the most costly options. The average monthly premium amount for an individual on COBRA is $660 and for a family, $1,872. The average annual deductible for single coverage is $1,763.3</li>
<li style="font-weight: 400;" aria-level="1">This is only a short-term option that won&rsquo;t get you anywhere close to Medicare age (65) if you&rsquo;ll be retiring in your early 50s. Even if your target retirement age is closer to the end of your fifties, you&rsquo;ll still need another insurance plan to cover you until you are eligible for Medicare.</li>
</ul>
<h2>Affordable Care Act (Obamacare)</h2>
The average cost of an ACA individual plan is $450 per month, and family plan $1,157. It&rsquo;s an expensive solution, but the good news is that you can&rsquo;t be denied coverage regardless of age or health condition. If you&rsquo;re between the ages of 50 and 54, you can expect to pay about $529 for ACA coverage, and those between 55 and 59 will pay a lot more at $771, a $242 increase.4
ACA premiums can be reduced if you are eligible for advance premium credits. These are based on income and taxable household size. Penalties apply if you underestimate your income and pay a lower rate, so it&rsquo;s better to overestimate income on your application.&nbsp;
Note: You must apply for this insurance within 60 days before or after retiring. Check out our Early Retirement Healthcare course for more information on the Affordable Care Act.
<h2>Short-Term Health Insurance</h2>
Another stop-gap insurance plan is a short-term medical plan. This type of plan could be an option for you if you&rsquo;re in good health, have no chronic medical conditions, rarely see a doctor and take few to no prescriptions. That&rsquo;s because coverage is minimal, and expenses above basic medical needs can add up quickly.&nbsp;
Before deciding on a short-term medical plan, it&rsquo;s important to know that you can expect very high deductibles, even though the monthly payment tends to be reasonable. For a 55-year-old non-smoking female living in Virginia, you could expect to pay anywhere from $162 to $406 per month for a 3-month plan with a $5,000 to $10,000 deductible. But chronic or pre-existing conditions can increase premiums or even disqualify you for a short-term medical plan, unlike an ACA plan. Short-term medical plans last for up to a year and can be canceled at any time.5
<h2>Find Part-Time Work That Offers Insurance</h2>
You&rsquo;re only in your fifties. It&rsquo;s not improbable that you may want to pursue another occupation or open your own business. Be sure to do what you love, but try to find a gig that offers insurance benefits.&nbsp;
<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Fidelity Releases 2022 Retiree Health Care Cost Estimate: 65-Year-Old Couple Retiring Today Will Need an Average of $315,000 for Medical Expenses.&rdquo; Businesswire, 16 May 2022,&nbsp; <a href="https://www.businesswire.com/news/home/20220516005224/en/" rel="follow noopener" target="_blank">https://www.businesswire.com/news/home/20220516005224/en/</a>.&nbsp; Accessed 22 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2017 Employer Health Benefits Survey.&rdquo; KFF, 19 September 2017, https://www.kff.org/report-section/ehbs-2017-summary-of-findings. Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2022 Employer Health Benefits Survey.&rdquo; Kaiser Family Foundation, 27 October 2022, <a href="https://www.kff.org/report-section/ehbs-2022-summary-of-findings" rel="follow noopener" target="_blank">https://www.kff.org/report-section/ehbs-2022-summary-of-findings</a>. Accessed 19 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;ACA Index Report on Unsubsidized Consumers.&rdquo; August 2021. <a href="https://news.ehealthinsurance.com/_ir/68/20217/ACA_Unsubsidized_Index_Report_2021.pdf" rel="follow noopener" target="_blank">https://news.ehealthinsurance.com/_ir/68/20217/ACA_Unsubsidized_Index_Report_2021.pdf</a>. Accessed 22 December 2022</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Short-Term Health Insurance.&rdquo; eHealth, https://www.ehealthinsurance.com/short-term-health-insurance. Accessed 22 December 2022.</li>
</ol>

Your fifties are the perfect time to take out an insurance policy. You&rsquo;re still young and healthy, and you&rsquo;re still earning money (assuming you haven&rsquo;t retired already). Two types of insurance that can be crucial to any retirement period are long-term care insurance and life insurance. If you know you&rsquo;ll be retiring in your early fifties, the time to initiate these policies would be your mid-forties.&nbsp;
<h2>Long-Term Care Insurance&nbsp;</h2>
The staggering cost of healthcare continues to be one of the biggest budget-busters for retirees. A 65-year-old couple retiring today should expect to spend about $315,000 on healthcare expenses over the course of their lifetime. And since you&rsquo;re planning an early retirement, your bill could be even higher.&nbsp;
Sadly, those large figures don&rsquo;t include long-term care, like time spent in a nursing home or rehabilitation facility. One year in a nursing home can cost $100,679 for a semi-private room, and an assisted living facility isn&rsquo;t much cheaper, costing $57,289.1 Long-term care insurance can help offset these enormous bills, and other key services like in-home care, palliative and hospice care, and Alzheimer&rsquo;s facilities, should you ever need this type of care. And there&rsquo;s a good chance you might: estimates indicate about 70 percent of people over the age of 65 will require long-term care services during their lifetime.2
If you're hoping to retire in your fifties, you&rsquo;ll want to look into obtaining a long-term care insurance policy in your forties, while you&rsquo;re still working. You&rsquo;ll likely have the advantage of doing well on the required health exams, but know that premiums for long-term care insurance aren&rsquo;t guaranteed and do increase over time. Still, though premiums can be steep (average 2022 annual premiums for 55-year-olds are $950 for a single, man, $1,500 for a single woman, and $2,080 for a couple), they more than pay for themselves if you do need to make a claim against your long-term care policy.3
<h2>Life Insurance</h2>
Do you need life insurance in retirement? It&rsquo;s a common question with a relatively simple answer: if there&rsquo;s someone who depends on you for their welfare, like a disabled adult child or a younger spouse, you should have life insurance. And in some cases, such as with a permanent life plan, your life insurance policy may come with a &ldquo;cash value&rdquo; component that can be used as additional income in retirement. You can take a loan from the cash value portion of your policy, then pay it back over time, or simply have the amount reduced from the final payout your loved ones will receive upon your passing.4
The monthly premium for a life insurance policy can vary widely based on a number of factors, like your age, current health, smoking status and more, but estimates indicate the average monthly cost of life insurance is typically between $60 and $285 for 55-year-olds.5
The two main types of life insurance policies available to you are term life and whole life.
<h3>Whole Life Insurance</h3>
A whole life plan is a life insurance plan that lasts for your whole life. There&rsquo;s no need to worry about keeping track of when your plan ends; it&rsquo;s set up to end when you pass. If you opt for a whole life insurance plan, you&rsquo;ll choose between a permanent plan and a universal plan.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Whole life Permanent. With a permanent plan, your premiums stay the same each month (or year if you choose to pay your premiums annually).</li>
<li style="font-weight: 400;" aria-level="1">Whole life Universal. If you have a universal plan, you&rsquo;ll enjoy flexible premiums that allow you to pay less or more depending on your financial situation. This type of plan requires a bit of extra discipline though; paying lower premiums for a long time sets you up for a larger bill later on, which isn&rsquo;t exactly beneficial as you approach retirement.</li>
</ul>
Whole life insurance tends to be more expensive than term life because of lifelong coverage, cash value accumulation, and even potential dividends. On average, if you purchase a whole life policy in your 50s, you can expect a monthly rate of $115 to $680 depending on your policy amount, gender, and age. But you&rsquo;ll notice that it's better to purchase when you&rsquo;re younger to lock in a smaller monthly premium.6
<img src="https://cdn.buttercms.com/Ka7v8ZhSLaD71tmCV7Rw" alt="Lesson5_ whole life insurnace.png" />
<h3>Term Life Insurance</h3>
Unlike whole life, term life insurance lasts for a finite amount of time. Most policies last 10 or 20 years, after which you have to sign up for a new policy or go without coverage. While term life is less expensive to purchase than whole life, keep in mind that starting a new policy becomes more expensive as you age, which is a drawback of term life insurance. That&rsquo;s why, like long-term care insurance, it&rsquo;s a good idea to purchase life insurance while in your fifties and still relatively healthy. On average, a healthy, 50-year-old non-smoker can expect around a $140 monthly premium for a $500,000 30-year term life policy.7
<img src="https://cdn.buttercms.com/lsMmKF9tSBWH71XvTR6R" />
Overall, life insurance helps decrease financial burden on your family if you pass and could be used as another savings vehicle should you retire early.&nbsp;

<h4>Sources:</h4>
<ol>
<li>&ldquo;Cost of Long Term Care by State: Cost of Care Report.&rdquo; Genworth, www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;How Much Care Will You Need?&rdquo; LongTermCare.gov, 18 February 2020, https://acl.gov/ltc/basic-needs/how-much-care-will-you-need. Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2022 Long-Term Care Insurance Information.&rdquo; American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2022.php. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;How to Use Life Insurance for Retirement.&rdquo; John Hancock, https://www.johnhancock.com/ideas-insights/how-to-use-life-insurance-for-your-retirement.html.&nbsp; Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;U.S. Monthly Averages as of December 1, 2022.&rdquo; Policygenius, https://www.policygenius.com/life-insurance/life-insurance-price-index/december-2022/. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">Bibey, Chris. &ldquo;How Much Does Whole Life Insurance Costs? Rates &amp; Charts.&rdquo; Top Whole Life, 24 January 2022, https://topwholelife.com/whole-life-insurance-faqs-much-whole-life-insurance-cost. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Term Life Insurance Quotes.&rdquo; Quotacy, https://www.quotacy.com/term-life-insurance-quotes. Accessed 23 December 2022.Accessed 23 December 2022.</li>
</ol>

If you choose to retire between 50 and 59, you&rsquo;ll have to wait between 3 to 12 years before you receive Social Security benefits. And if you&rsquo;re in the early part of your fifties, you&rsquo;ll need to last a few years before you&rsquo;re able to make penalty-free withdrawals from your 401(k) and IRA accounts. And remember to account for inflation if you plan to survive several decades on your current savings.&nbsp;
<h2>Average Retirement Savings: Age 50 to 59</h2>
Let&rsquo;s see how your savings stack up against others in their fifties. The average retirement savings for someone between 45 and 55 is $254,720; and for those 55 to 64, the average retirement savings is $408,420.1 Looking at the example about Bob and Mary in the earlier lesson &ldquo;How Long Your Savings Will Last By Budget,&rdquo; it&rsquo;s clear that you&rsquo;ll need quite a bit more in your nest egg in order to live several decades without drawing a paycheck. 
After all, with savings of $500,000 - more than twice the average savings of those 45 to 55 - Bob and Mary would run out of money in their mid-seventies at a monthly spending amount of $4,000. Reducing that amount by half (spending only $2,000 per month) would certainly allow their money to last longer, but can they survive on that amount? Can you? It&rsquo;s all about figuring out your monthly budget, then weighing your numbers against your savings and your retirement score to see if you&rsquo;re where you need to be. Below, we&rsquo;ll discuss how to make your retirement accounts work for you if you&rsquo;re planning an early retirement.&nbsp;
<h2>401(k)</h2>
The average 401(k) balance for 50-59 year olds is $160,000. The median balance is $60,900. Although the median figure is a more realistic indicator of the average person&rsquo;s situation, you&rsquo;ll need more than either of these amounts if you plan to retire in your 50s and draw income for the rest of your life.2
If you have a well-funded 401(k), that&rsquo;s excellent. But don&rsquo;t count on withdrawing anything from it until you reach 59 &frac12;. Otherwise, you&rsquo;ll be paying a big chunk in penalties and taxes. If you&rsquo;re in need of funds earlier, you can enact the &ldquo;Rule of 55&rdquo; (if you&rsquo;ve reached age 55) and pull money from your most current 401(k), assuming you have more than one. Under this rule, you can pull money from your most current 401k without penalty if you&rsquo;ve hit age 55. But this only applies to that 401k, not those still held by former employers.
If your 401(k) account falls short of what you need, remember, once you reach 50, you can make catch-up contributions. In 2023, you can add an additional $7,500 per year for a total allowable contribution (including catch-up contributions) of $30,000. This is something to weigh heavily if you&rsquo;re considering retiring in your 50s. You&rsquo;ll be exiting the workplace during a decade that could otherwise be one of the biggest wealth-building decades of your life. There&rsquo;s no doubt that ten to twenty years of extra contributions will give your 401(k) a healthy boost.&nbsp;
Keep in mind: If the SECURE Act 2.0 is passed, catch-up contributions could increase even higher.
<h2>Individual Retirement Account (IRA)</h2>
Once your employer has maxed out matching your 401(k) contributions, it&rsquo;s a good idea to consider other investment options, like an IRA or Roth IRA.
If you are planning to retire in your 50s, hopefully you&rsquo;ve been contributing to an IRA for years because they offer great tax advantages. A traditional IRA allows tax-deductible contributions but taxes withdrawals. On the other hand, a Roth IRA taxes contributions but, after age 59 &frac12;, allows for tax-free withdrawals. In 2023, the contribution limit to your IRA is $6,500 up to age 50 and $7,500 thereafter.&nbsp; 
<h3>How much should I have in my IRA at 55?&nbsp;</h3>
While everyone&rsquo;s goals and dreams are different, many people who aim to retire in their 50s have been saving since that first paycheck. Indeed, if you contributed the maximum amount to an IRA starting at age 23, you could now be sitting on a nest egg of more than $700,000 in your IRA. If that&rsquo;s the case, be sure to enter this into the Silvur app when you calculate your Retirement Score. Savings like this could be the difference between a Retirement Score that says you&rsquo;re ready to retire, and one that indicates you need to take another look at your strategy.&nbsp;
<h2>Roth Conversions</h2>
Another strategy for early retirees is a Roth conversion. Here, you&rsquo;ll convert your assets to a Roth IRA, allowing your money to continue to grow tax free. And when the time comes, you&rsquo;ll also benefit from tax-free withdrawals. Roth conversions will work in your favor if you think your retirement income will increase or stay the same as your current income, because it will decrease your future tax bill on withdrawals. There&rsquo;s no limit on how much money you can convert to a Roth IRA. But however much you do convert, know that it will count as taxable income which could bump you into a higher tax bracket.&nbsp;
Here&rsquo;s a tip: consider spreading your conversions over time if your income stays relatively consistent year over year. This will ensure you don&rsquo;t get a big tax bill by converting all at once.
As a reminder, you&rsquo;ll be subject to Required Minimum Distributions (RMDs) once you hit 73 (or 72 depending on your birth year) and by converting qualified RMD accounts&mdash;like IRAs and 401(k)s&mdash;into a Roth IRA, you&rsquo;ll not be subject to RMDs and have tax-free withdrawals.
<h2>Pension</h2>
If you&rsquo;ve earned a pension during your working years, it&rsquo;s yet another tool that can get you closer to your goal of retiring in your fifties. While state pensions don&rsquo;t start paying out until you reach age 66, you can withdraw money from most workplace or personal pensions when you turn 55. It&rsquo;s important to check the exact rules for your pension, since they&rsquo;re all different.&nbsp;
Per the Pensions Right Centers, the median private pension benefit of individuals age 65 and older was $6,988 a year. The median state or local government pension benefit was $26,734 a year.3
You can withdraw money from your pension as a lump sum or a monthly payout. A good way to support an early retirement is to take the money as a lump sum payout and invest it in an ETF or mutual fund to let it continue to grow. This strategy is best if you have experience managing your own investments.&nbsp;&nbsp;
<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Benson, Alana. &ldquo;The Average Retirement Savings by Age and Why You Need More.&rdquo; NerdWallet, 24 June 2022, https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">Milena. &ldquo;Average 401k Balance by Age - Stats &amp; FAQs.&rdquo; BalancingEverything, 21 November 2022, https://balancingeverything.com/average-401k-balance-by-age. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Income from Pensions.&rdquo; Pension Rights Center, 28 November 2022, http://www.pensionrights.org/publications/statistic/income-pensions. Accessed 23 December 2022.</li>
</ol>

Social Security might be a buzzword among retirees, but this benefit won&rsquo;t be in the cards for you if you retire in your fifties. That is, unless your spouse has already passed by this point and you&rsquo;re entitled to survivor benefits. Those can begin as early as age 50 if you&rsquo;re disabled, but you can receive benefits at any age if you&rsquo;re providing care for minor or disabled children who belonged to your spouse who has passed.&nbsp;
If neither of those situations applies to you, you&rsquo;ll need to wait quite a while before recognizing your Social Security benefits. But before you leave the workforce, remember that Social Security takes the highest 35 years of your earnings in order to calculate your future benefits. If you haven&rsquo;t put in that many years, a zero will be entered for each year below 35, which will drastically reduce your benefits. So be sure you&rsquo;ve hit that mark before giving notice.
The earliest you can draw from Social Security is 62. But if you choose to do this, your benefits will be reduced for the rest of your life if you opt to start receiving benefits at such a young age. The &ldquo;prime&rdquo; time to start collecting Social Security benefits is what&rsquo;s called &ldquo;Full Retirement Age,&rdquo; which for most people is between the ages of 66 and 67. Unless you&rsquo;ve saved a great deal of money, it can be mind-boggling to think that if you retire at 50, you might have to wait a whopping 17 years before being able to add Social Security benefits to your monthly income. But electing at the earliest possible time - age 62 - will cause you to see a lifetime decrease in benefits by as much as 30% compared to electing at FRA.&nbsp;
Retiring without benefits is difficult, but it&rsquo;s not impossible. Short-term savings accounts, like CDs and money market accounts, can help you through the years before you&rsquo;re able to start tapping into retirement accounts and Social Security benefits.&nbsp;

We&rsquo;ve covered how crucial it is to plan for retirement if you&rsquo;re hoping to retire in your fifties. Between the high cost of healthcare, the years of wealth building you&rsquo;ll be missing out on, and the lack of Social Security benefits, retiring in your fifties certainly isn&rsquo;t for the faint of heart. What&rsquo;s more, there&rsquo;s another hurdle you&rsquo;ll need to overcome: taxes in retirement.&nbsp;
<h2>Taxes on Social Security benefits</h2>
It may not affect you early on in retirement when you&rsquo;re not yet collecting benefits, but it&rsquo;s important to know that your Social Security income could be subject to taxes. The tax rate is based on your combined income. You can determine your combined income by adding the following: Your adjusted gross income + nontaxable interest + &frac12; of your Social Security Benefits.
If your combined income is:
<ul>
<li style="font-weight: 400;" aria-level="1">$34,000 or more ($44,000 or more if you&rsquo;re married filing jointly), up to 85% of your benefits will be subject to federal tax.</li>
<li style="font-weight: 400;" aria-level="1">Between $25,000 to $34,000 (or between $32,000 and $44,000 as a joint filer), you&rsquo;ll be taxed on 50% of your benefits.&nbsp;</li>
</ul>
And if you live in any of the 12 states listed below, you could also be subject to state-level taxes on your benefits. The following states are considered not-so-friendly to retirees from a tax perspective: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont and West Virginia.
To learn more about the specifics of each state&rsquo;s Social Security tax policy, take a look at our course called, &ldquo;<a href="https://www.silvur.com/retirement-school/your-government-benefits-are-subject-to-taxes" rel="follow noopener" target="_blank">Your Government Benefits Are Subject To Taxes.</a>&rdquo;
<h2>Taxes Based on Location</h2>
Where you live may have a big factor on your taxes. Not only will cost-of-living and healthcare expenses differ by location, but federal and state taxes are based on where you live. This can have a big impact on your retirement savings everytime you withdraw. And if you plan to leave an estate, your estate could be taxed federally and at the state level. Alternatively, if you receive an inheritance, you&rsquo;d also be subject to taxes based on your location.&nbsp;
Read our class, &ldquo;<a href="https://www.silvur.com/retirement-school/how-location-impacts-taxes" rel="follow noopener" target="_blank">How Location Impact Taxes</a>,&rdquo; to get a deeper look at how much each state taxes as well as any special tax deductions for older Americans. In addition, go to our Cost of Living calculator to compare different tax rates and see if moving impacts your Retirement Score.
<h2>Taxes on Investment Accounts</h2>
Retiring early could make it tempting for you to make early withdrawals from your retirement accounts. But doing so could result in heavy penalties (aside from the interest you&rsquo;d be missing out on!). Early withdrawals from tax-deferred accounts will result in a 10% penalty. So, for example, if you withdraw $10,000, you&rsquo;ll face $1,000 in penalties, which will reduce the amount of money you&rsquo;ll be able to use. In addition, the entire amount of the withdrawal ($10,000 in this example), will be taxed as income at the end of the year.1
If your money is sitting in a Roth account, it can continue to grow untouched. But if you withdraw your earnings before you reach the age of 59 &frac12;, you will likely have to pay taxes along with a 10% penalty.&nbsp; The IRS does allow for some penalty-free withdrawals before age 59 &frac12;, called &ldquo;Qualified Distributions&rdquo; if you meet specific requirements, such as:2
<ul>
<li style="font-weight: 400;" aria-level="1">If you become permanently disabled.</li>
<li style="font-weight: 400;" aria-level="1">For qualified college education expenses.</li>
<li style="font-weight: 400;" aria-level="1">For qualified birth or adoption expenses.</li>
<li style="font-weight: 400;" aria-level="1">To purchase your first home (there is a $10,000.00 lifetime cap).</li>
</ul>
If you meet one of these scenarios, you can avoid paying the early withdrawal penalty, but you may still have to pay taxes on your earnings.
If you have money in tax-deferred accounts like a traditional 401(k) or 403(b), SEP, or traditional IRA at the time you turn 73 (or 72 if you were born before December&nbsp; 31,1950), you will be required to take yearly distributions called Required Minimum Distributions, or RMDs. These amounts are then treated as taxable income. Learn more about RMDs in our class &ldquo;<a href="https://www.silvur.com/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>.&rdquo;
If you&rsquo;ve had a life-long dream of retiring in your fifties, you likely have money saved in several different types of accounts-- some of which are taxable and others which are not. What you may not realize is that you can drastically minimize the impact to your taxes by making strategic choices about the order in which you withdraw money from these accounts. This is referred to as withdrawal sequencing.&nbsp;
If you have multiple types of accounts, sequencing your withdrawal of funds can be a significant tax advantage, and there are a few different ways to go about it. Always be sure to keep RMDs in mind when deciding which withdrawal strategy to employ.&nbsp;
Below, we&rsquo;ve included a section from our &ldquo;<a href="https://www.silvur.com/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>&rdquo;&nbsp;course that outlines different withdrawal strategies you could employ. Choosing the right strategy will ensure you&rsquo;re able to hang on to as much of your hard-earned money as possible during your long retirement.&nbsp;
Taxable First, then Tax-Deferred
<ul>
<li style="font-weight: 400;" aria-level="1">Withdraw from taxable accounts first (Social Security, annuities, other forms of earned income)</li>
<li style="font-weight: 400;" aria-level="1">Then start to draw down tax-deferred accounts (401(k)s, traditional IRAs, etc.)</li>
<li style="font-weight: 400;" aria-level="1">Leave the tax-exempt accounts (Roth IRA or Roth 401(k)) for last</li>
</ul>
Doing this allows you to potentially benefit from a lower tax rate and prioritizes leaving an inheritance for your heirs.
Taxable First, then Tax-Exempt:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Drawdown taxable accounts first, like the first method,&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Then draw down the tax-exempt accounts (your Roth accounts),&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Finally, start drawing on the tax-deferred accounts (401(k)s, etc.).&nbsp;</li>
</ul>
This method reduces your tax bill throughout retirement and can make sense if you anticipate a lower tax rate in the future when you start drawing from the tax-deferred accounts.&nbsp;
Tax Bracket Management:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Start with your tax-deferred accounts (e.g., IRA &amp; 401K accounts) first, but only up to a specific tax bracket (e.g. 12%, 22%, etc),</li>
<li style="font-weight: 400;" aria-level="1">Then withdraw from taxable accounts,</li>
<li style="font-weight: 400;" aria-level="1">Leave tax-exempt funds for last.&nbsp;</li>
</ul>
This method prioritizes passing your estate to your heirs and may be a good strategy if you expect a higher tax rate in the future.
<h2>Taxes from Inherited Accounts</h2>
Are you planning an inheritance from a loved one will add cushion to your early retirement? Although that might be true, there&rsquo;s still taxes and rules to consider if this inheritance might be &ldquo;worth&rdquo; it. Typically, any inherited accounts are still subject to RMDs and must be distributed within a 10-year period. These inherited accounts, outside of Roths, count as taxable income and can bump you into a new tax bracket. And depending on where you live, you may incur state taxes too. If you don&rsquo;t want to deal with the taxes and maybe responsibilities of real property or creditors, you have an option to disclaim an inheritance. To understand all the tax liabilities and rules that come with an inheritance, go to our course &ldquo;Taxes in Retirement&rdquo; to get a deeper understanding.&nbsp;
<h4>Sources:&nbsp;</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Retirement Topics - Exceptions to Tax on Early Distributions.&rdquo; IRS, 19 January 2021, https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions. Accessed 30 July 2021.</li>
</ol>

Just because you&rsquo;re retiring doesn&rsquo;t mean you have to stop making money altogether. Today, there&rsquo;s a way to make money doing just about anything, which can make it that much easier to retire regardless of your age. Here are some ideas to consider if you&rsquo;re hoping to set up some income streams, no matter how small or large, to supplement your retirement income.&nbsp;
<h2>1. Get a Side Job</h2>
Working after retirement keeps your mind active and sharp, boosts your social life and provides extra income. If you left your previous employer on good terms, consider inquiring about reducing your hours to part-time. Or, try your hand at something new. You probably won&rsquo;t be the oldest person on the job. The Bureau of Labor Statistics predicts that 30% of all 65 to 74-year-olds will be working in 2026.1 Once you begin receiving Social Security benefits, make sure to check on earnings limits.&nbsp;
Something to think about: 70% of our members plan to work part-time in retirement. See how adding part-time work can increase your Retirement Score.
<h2>2. Sell Assets</h2>
Declutter your house and pocket some cash in the process by selling your stuff at a garage sale or online through Nextdoor, Poshmark, Craig&rsquo;s List or eBay.
<h2>3. Move to a Retiree-Friendly Area</h2>
While interest rates are low and housing markets are hot, you may want to relocate to an area with a lower cost of living. Florida and Texas are two retirement-friendly states where you can get more house for the money and save on taxes, too. For example, moving from NYC to Florida can add 7 years to your Retirement Score and allow you to say goodbye to income taxes and high cost of living.&nbsp;
<h2>4. Ladder Money Markets and CDs</h2>
Staggering maturity dates for Money Market accounts or CDs (3 months, 6 months, 9 months, 12 months, etc.) makes your investments more readily available while earning higher rates of interest on longer term investments. Laddering these accounts also protects you from investing too much money at too low a rate for too long a time.2
<h2>5. Rent Part of Your Home</h2>
If you have a spare bedroom or guest house, consider renting it for extra income. Or perhaps you could rent storage space in your garage, or offer to park a boat or an RV on your property for extra cash. Just make sure to check out tax ramifications and HOA guidelines first.
<h2>6. Consider Home Equity</h2>
Your home is not only your castle; sometimes it can be your cash cow. Leverage the equity in your house. Home equity loans, reverse mortgages and even the outright sale of your home can provide the extra cash you need. Stretch those dollars even more by downsizing or moving to a retirement-friendly state where you&rsquo;ll get more house for your money.&nbsp;
<h2>7. Cut Down on Non-Essential Expenses</h2>
Once you start looking for ways to save money, you&rsquo;ll realize how much money you&rsquo;ve wasted over the years. To cut back on your budget: cancel your landline phone and use only your smartphone. Stream your favorite TV programs and say good-bye to outlandish cable TV bills. Prepare home-cooked meals instead of eating out. Become a one-car family again and save on insurance, maintenance, fuel and tires. Increase your insurance deductibles. Rent pricey yard equipment like pressure washers. Install a smart thermostat to regulate house temperature. Order 90-day prescriptions to save on drug costs.&nbsp;
<h2>8. Volunteer</h2>
You can&rsquo;t put a price on helping others&mdash;or compute the good that comes from volunteering. It boosts self-esteem, makes the world a better place and may even lead to a part-time job. Dorothy, a court-appointed special advocate (CASA) volunteer, was eventually hired by the local Boys and Girls Club. Leslie&rsquo;s job as an activities coordinator for a senior citizen&rsquo;s home was a direct result of her years volunteering at their weekly bingo games. Pay it forward and you just may get a payback, too.

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Labor Force Participation Rate for Workers Age 75 and Older Projected to be Over 10 Percent by 2026.&rdquo; Bureau of Labor Statistics, 29 May 2019, https://www.bls.gov/opub/ted/2019/labor-force-participation-rate-for-workers-age-75-and-older-projected-to-be-over-10-percent-by-2026.htm. Accessed 10 August 2021.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Gibbs, Karen. &ldquo;How a CD Laddering Strategy Can Elevate Your Savings.&rdquo; Life and Money by Citi,10 October 2019, https://www.lifeandmoney.citi.com/money/savings/cd-ladder-strategy-for-high-interest-saving. Accessed 30 July 2021.</li>
</ol>

Clearly, there&rsquo;s a lot to consider when it comes to retiring in your fifties. Here&rsquo;s a story of a couple who successfully left the workforce in their fifties.&nbsp;
<h2>Retirement in your 50s: A Real-life Story</h2>
Although it might seem like a farfetched concept to most, it can be do-able if you plan accordingly. Take Jim and Mary W., who did not want to wait until age 65 to retire. &ldquo;We saw a lot of adults who retired at 65 and they didn&rsquo;t get a very long retirement because they got sick,&rdquo; says Jim. So, when they reached 55, they both agreed, &ldquo;Let&rsquo;s retire.&rdquo;&nbsp;
Fortunately, they&rsquo;d worked for the same companies since their 20s, so they received good pensions as well as health coverage that included Medicare supplements when they turned 65. They had prepared well with 401(k)s, IRAs, investments and a Health Savings Account. And, they planned on taking Social Security at 62.
Jim, a &ldquo;spreadsheet guy,&rdquo; had tracked their spending for the previous 10 years and had an excellent idea of future expenses. The only major change they made was to leave the high-tax state of New York and relocate to retirement-friendly Florida which boosts their Retirement Score by 7 years and 3 months.
Their advice: &ldquo;Get out as soon as you can! &rdquo; Of course, this is only a good idea if you&rsquo;re prepared financially.&nbsp;
If you&rsquo;re like Mary and Jim and planning to relocate in retirement, find out how your Retirement Score will change by comparing zip codes with Silvur&rsquo;s Cost of Living calculator.

There&rsquo;s no universal sum of money that guarantees a comfortable retirement, especially if you&rsquo;re retiring in your 50s. But, if you want to retire successfully, there are some basic guidelines that everyone needs to follow.
<ol>
<li style="font-weight: 400;" aria-level="1">If you want to retire in your fifties, use Silvur to determine your Retirement Score.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Live lean&mdash;below your means&mdash;and invest the money you save toward your retirement.</li>
<li style="font-weight: 400;" aria-level="1">Test-drive your retirement budget for six months before you retire. Adjust it as needed.</li>
<li style="font-weight: 400;" aria-level="1">Build your passive income strategy to support your early retirement. Remember, you&rsquo;ll get penalized on early withdrawals from your retirement accounts.</li>
<li style="font-weight: 400;" aria-level="1">Set up an emergency fund with enough money to cover six months to one year of expenses.</li>
<li style="font-weight: 400;" aria-level="1">Make it a priority to pay off your mortgage before retiring. A mortgage-free house will be a gold mine when you retire. Maintain it well. If it&rsquo;s available where you live, investigate when you can apply for a freeze on property assessments.</li>
<li style="font-weight: 400;" aria-level="1">If you think you might want to live out your retirement in a different location, consider moving before retirement so it&rsquo;ll be easier to obtain a mortgage. This also allows you to ensure you like the area you&rsquo;ve chosen.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">&nbsp;Make a plan for health insurance coverage until you&rsquo;re 65. Familiarize yourself with all parts of Medicare.</li>
<li style="font-weight: 400;" aria-level="1">&nbsp;Make or update your will. Appoint a healthcare power of attorney. Draw up advance directives including a living will and organ donation specifics. Check into pre-paid funeral plans along with long-term care and life insurance.</li>
<li style="font-weight: 400;" aria-level="1">Store important papers&mdash;wills, deeds, mortgages, investments, etc. &mdash; in one safe place. Tell a trusted family member of its location.</li>
</ol>
Retiring in your fifties is possible. But if you determine you&rsquo;re not quite ready financially, it&rsquo;s best to wait. Outliving your money is the worst thing that could happen in retirement, and you don&rsquo;t want to be forced to find an income when you&rsquo;re much older and infirm. Adept planning and budgeting are crucial to an early retirement. If after taking this course you find you&rsquo;re truly in the clear, congrats! It&rsquo;s time to enjoy an early retirement.

Ready to retire in your fifties? Now it&rsquo;s time to find out how much you'd save and what your monthly expenses will look like for the next 30 to 40 years. We can&rsquo;t stress enough that expenses (especially healthcare bills) might hit you later on in life, but it&rsquo;s better to stress test all your retirement decisions through Silvur to improve your Retirement Score.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Play out different scenarios. Unexpected events happen throughout life. See how those changes can impact your Retirement Score so you can plan accordingly.</li>
<li style="font-weight: 400;" aria-level="1">Calculate your healthcare costs into your savings. Healthcare costs vary by location. Estimate how much your Medicare plan will cost based on where you live.</li>
<li style="font-weight: 400;" aria-level="1">Move before you retire. Moving can save you money and extend your Retirement Score. But, it&rsquo;s better to do this before you retire to secure a mortgage. As you're scouting out locations, you can compare zip codes in our Cost of Living calculator to find which area will extend your savings the most.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Find the best age to elect Social Security. The age you elect is the most crucial decision because this reflects your income for the rest of your life. Project your lifespan in our Social Security calculator to see which age will give you the most monthly or lifetime benefits.&nbsp;</li>
</ul>

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You’ve reached your 50s. But are you in good shape to retire? Here’s a look at how you compare to others your age, along with helpful information to help you plan an early exit from the workplace. 

You&rsquo;ve reached your early sixties. That means you&rsquo;re definitely eligible for retirement - if you can afford it. Are you in good shape to retire? Here&rsquo;s a look at how you compare to others your age.&nbsp;

Retiring between 60 and 64 can be mighty tempting. However, according to CDC projections, if you&rsquo;re in your early sixties, you&rsquo;ll probably live another 18 years or more if you&rsquo;re a man and 21 years or more if you&rsquo;re a woman.1 That&rsquo;s a long time to go without a paycheck. Considering the cost of healthcare and long-term care and factoring for inflation, now more than ever you should plan for a longer life.
In this course, we&rsquo;ll cover everything you need to know and think about if you&rsquo;re planning to retire between the ages of 60 and 64; it&rsquo;s not exactly early retirement, but many people do continue to work past these ages. If you&rsquo;re considering retiring in your early 60s, this comprehensive course is for you.&nbsp;
<h3>What you&rsquo;ll learn in this class</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">What to do before you retire. There are some key things you need to do before you stop getting a paycheck.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Healthcare. You&rsquo;re close to Medicare eligibility, but not quite there yet. Find out what your healthcare options are.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Investments. Your savings are more important than ever now that you&rsquo;re seriously considering retirement. Do you have a firm grip on your money?&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Benefits. Some in your age group may be drawing Social Security benefits already, but it pays (literally) to wait!&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Taxes. Taxes are still a part of life, even in retirement. In fact, that&rsquo;s even more the case as you begin to tap into your investment accounts.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Checklist. Are you really ready to retire?&nbsp;</li>
</ul>

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Xu JQ, Murphy SL, Kochanek KD, Arias E. &ldquo;Mortality in the United States, 2018.&rdquo; CDC, 30 January 2020, https://www.cdc.gov/nchs/products/databriefs/db355.htm. Accessed 30 July 2021.</li>
</ol>

How much money you&rsquo;ll need is the greatest enigma about retirement, and something that&rsquo;s at the forefront of everyone&rsquo;s mind. But if your spending outweighs your retirement savings, you may run out of money in retirement - something Silvur wants you to avoid. By carefully planning your retirement strategy, you can retire in your early 60s as long as you stick to your spending budget.&nbsp;
While there&rsquo;s no magic number that works for everyone when it comes to retirement, it&rsquo;s helpful to plug your savings and investment information into the Silvur app to get your customized Retirement Score. This is a calculation that takes into account how much money you&rsquo;ve saved, along with factors like your age, when you hope to retire and when you&rsquo;re planning on drawing Social Security benefits (if you&rsquo;re eligible). Below is an example of what you can learn from Silvur&rsquo;s Retirement Score about your likelihood of having enough money to retire with.
Example
Remember Bob and Ellen from our 50-59 class? In this example they&rsquo;ve decided to wait until their early sixties to retire. Now, they both plan to retire at 60, and they&rsquo;ll be drawing Social Security starting at age 62. Together, they&rsquo;ve saved $500,000 in retirement accounts. But since they&rsquo;ll be retiring at 60, they&rsquo;ll be able to spend a little bit more compared to their counterparts who retired in their fifties.&nbsp;
Based on their $500,000 net worth, they&rsquo;ll be able to spend $4,000 a month while maintaining a Retirement Score of 113 years--making their savings last beyond their years.
But if Bob and Ellen spent $5,000 a month, their Retirement Score will dramatically decrease to 88 years and 5 months. The $1,000 difference a month equates to an additional 25 year in savings.
Let&rsquo;s suppose Ellen and Bob built their net worth to $1,500,000, they will be able to spend up to $7,000 a month. Their Retirement Score will be beyond 100 years allowing them to pass an inheritance.&nbsp;
Below, you&rsquo;ll see that with their Social Security income and their savings, Bob and Ellen should be able to outlive their money as long as they spend wisely and don&rsquo;t allow their monthly spending to go above $4,000 if their net worth was $500,000 and more.&nbsp;
<figure class="image"><img src="https://cdn.buttercms.com/amdonVwtTeGufHUv6lWr" alt="undefined" />
<figcaption>Note: We assume that Ellen and Bob are calculating their Retirement Score at age 55. The maximum Retirement Score for a 55-year-old is 135 years.&nbsp;&nbsp;</figcaption>
</figure>
<h3>What You Can Do Now</h3>
If you&rsquo;re looking to retire anywhere between 60 to 64, plug your basic information into Silvur to obtain a Retirement Score. This will give you a good idea how long your savings will last in retirement, and whether you&rsquo;re on par to retire in your early to mid-sixties.&nbsp;&nbsp;

Advance planning is key when it comes to this big step in your life. Living without a paycheck isn&rsquo;t something to be taken lightly, and you want to make sure your retirement is as comfortable and stress-free as possible. That&rsquo;s why there are some steps you should take before you exit the workforce.&nbsp;
<h2>1. Commit to a Retirement Budget</h2>
In the year before you say your final goodbye to the full-time workforce, you&rsquo;ll need to nail down your retirement budget. It&rsquo;s safe to say that your financial situation will change once you&rsquo;re retired, and the sooner you&rsquo;re able to gain a clear picture of what that will look like, the better off you&rsquo;ll be. One easy way to budget in retirement is to come up with a total monthly spending amount similar to the example with Bob and Ellen in the lesson &ldquo;How Long Your Savings Will Last By Budget.&rdquo; Your Retirement Score will give you an idea of how long your savings will last you based on your monthly budget.
When creating your budget, don&rsquo;t forget to account for large expenses like healthcare, and smaller ones that can sneak up and bust your budget, like cost-of-living adjustments. It&rsquo;s always good to live below your means so you can build an extra cushion for unexpected expenses.&nbsp;
<h2>2. Maximize Contributions to Retirement Accounts</h2>
The money you save in these accounts is meant to last you the rest of your life. Let that sink in. Since there&rsquo;s no way to know how long you&rsquo;ll live (outside of averages, of course), you&rsquo;ll have to shoot high. One of the best ways to do that is to contribute the maximum amount to retirement accounts like your 401k and IRA.&nbsp;
Of course, there are yearly limits on how much you can contribute, but these are increased for people over 50. So by your early 60s, you could have many thousands of additional dollars to spend in retirement if you&rsquo;ve been taking advantage of these increased amounts since you turned 50.&nbsp;
<h2>3. Look into Long-term Care Insurance and Life Insurance</h2>
Just like healthcare (and death and taxes!), it seems insurance never goes away, even in retirement. And if you&rsquo;re in your early to mid-60s, it&rsquo;s not too late for you to purchase long-term care insurance and life insurance policies. Maybe you&rsquo;ll never need them, but they can certainly be helpful if the unexpected happens. Learn more about both of these types of insurance in lesson &ldquo;<a href="https://www.silvur.com/retirement-school/long-term-care">Long-Term Care</a>.&rdquo; 
<h2>4. Make Catch-Up Contributions</h2>
How much are catch-up contributions? For 401ks, people over the age of 50 can contribute an additional $7,500 above the yearly contribution limit of $22,500. And for IRAs, you can contribute an additional $1,000 above the yearly contribution limit of $6,500. That means if you max out your catch-up contributions for all 10 years from your 50s to 60s, you&rsquo;ll put away another $85,000 toward your nest egg. 
<h2>5. Refinance or Downsize Your Home</h2>
Will you be moving in retirement? Whether you&rsquo;re hoping for a smaller mortgage payment (or to avoid one at all!) or a warmer, more retirement-friendly climate, it&rsquo;s best to take this step before you start your retirement. It&rsquo;ll be easier for you to obtain a mortgage while you still have a paycheck. In addition, closing costs, taxes, moving expenses and other hidden fees often make purchasing a new home more expensive than it seems at the start.&nbsp;
<h2>6. Review Portfolio Allocation</h2>
One thing you may wonder about as you approach retirement is whether your money is invested properly. You&rsquo;ll want to ensure you have the right mix of aggressive and conservative investments, based on your individual situation. It&rsquo;s only natural to want to &ldquo;de-risk&rdquo; your portfolio as retirement approaches. But remember, if you&rsquo;ll be retiring in your early to mid-sixties, you&rsquo;ll still need to account for some amount of inflation in the future. You can offset this by keeping a small portion of your stocks in more aggressive investments. Then, the rest of your money can be held in a more conservative investment than you&rsquo;ve had in the past.&nbsp;
Before you decide what allocation is right for you, review your budget - or create one ASAP and start living off it - and see how it&rsquo;s working for you. Will you be relying heavily on money from your portfolio during retirement, or will you be largely comfortable without it? What other sources of income will you have in retirement like a pension, property rental, or dividends? Once you understand how much you need to rely on your portfolio to cover your spending, you can determine how much risk you want to take in your portfolio.&nbsp;
Let&rsquo;s say you need to rely on your portfolio to cover your expenses while in retirement. This means you should take fewer risks in your portfolio by buying more bonds instead of stocks. Typically, retirees who enter into retirement have a 60/40 bonds-to-stock ratio in their portfolios.&nbsp;
<h2>7. Fully Fund Your HSA</h2>
A well-funded HSA can be a huge help for anyone, but that&rsquo;s particularly the case if you&rsquo;re hoping to retire in the years before Medicare kicks in. All healthcare options for retirees who don&rsquo;t yet qualify for Medicare are expensive; there&rsquo;s no way around that (see the next lesson &ldquo;Healthcare Options for Retirement at 60 to 64&rdquo; for a breakdown of your options). But an HSA allows you to withdraw the money you&rsquo;ve saved to use on qualified medical expenses at any age. And once you turn 65, you can use your HSA funds for non-medical purposes, but the withdrawals will be subject to ordinary income taxes. Don&rsquo;t forget that your HSA can be invested, which can be another tax-free investment vehicle for your retirement.&nbsp;
<h2>8. Build an Emergency Fund</h2>
By your early to mid-sixties, you&rsquo;ve got several different options for liquid assets if you&rsquo;ve been saving in a few different investment accounts. You can now tap into your 401k without penalty, which wasn&rsquo;t the case if you retired before the age of 59 &frac12;. But if you don&rsquo;t want to do that, use these last few months or years of work to build a stash of liquid assets like cash that you can keep at the ready in the event of an emergency or other unexpected expense.&nbsp;

You may choose to retire between 60 and 64, but your healthcare costs sure don&rsquo;t! In fact, you can expect to spend more on healthcare in retirement than any other time in your life. A 65-year-old couple retiring this year can expect to spend $315,000 in healthcare and medical expenses throughout retirement. For single retirees, the 2022 estimate is $165,000 for women and $150,000 for men.1
That equates to more than $12,600 per year for the rest of your life. And since Medicare doesn&rsquo;t kick in for another one to five years, you&rsquo;ll definitely need coverage. We&rsquo;ll discuss each below in order to help you make the best decision for you. And if you&rsquo;re hoping to dive even deeper into healthcare options before Medicare in retirement, visit our <a href="https://www.silvur.com/retirement-school/category/healthcare" rel="follow noopener" target="_blank">Early Retirement Healthcare</a> classes. 
<h2>Get Covered by Your Spouse&rsquo;s Insurance</h2>
If your spouse will be working longer than you, the easiest and most cost-efficient way to get insurance in early retirement is to be added to their company insurance plan.&nbsp;&nbsp;
<h2>Employer-Sponsored Health Insurance</h2>
If your company does offer insurance as a benefit for retirees, it&rsquo;s a good idea to take advantage of it, even if it&rsquo;s a high-deductible policy. Then, you can set up a Health Savings Account to cover future expenses if the insurance is HSA approved. There are three tax advantages of having an HSA: contributions are tax-deductible, interest earned is tax-free, and withdrawals are tax-free on qualified medical purchases. You can continue to contribute to your HSA until you go on Medicare in a few years, or receive Social Security, whichever occurs first.&nbsp;
Only a small minority of employers still offer health benefits to their retirees - only around 30% -&nbsp; and they&rsquo;re often large companies. But if you happen to qualify for one of these plans, it&rsquo;s likely to be one of the more cost-effective plans to choose from before Medicare. An added bonus? It&rsquo;s probably insurance you&rsquo;re already holding so you may not be forced to switch providers.2&nbsp;
<h2>COBRA</h2>
COBRA allows you to stay with your employer&rsquo;s plan for 18 months in the case of a termination or reduction in hours. You&rsquo;re getting closer to Medicare as you approach the latter half of this age bracket, but you&rsquo;re not quite there yet. That means COBRA may not cover the entire gap between ending work and becoming eligible for Medicare, but it will allow you to continue your current health coverage for at least a bit longer. If you&rsquo;re lucky and plan to be 65 within 18 months, COBRA can bridge you over to you qualify for Medicare. Although this type of continued coverage can be pricey - you&rsquo;ll be paying both your own and your company&rsquo;s portions now - but it can still be a better option than obtaining an entirely new policy. Estimates indicate the average annual COBRA premium for an individual (regardless of age) is $7,920 and for a family, the premium is around $22,464. The average annual deductible for a single worker is $1,763.3 
<h2>Short-Term Health Insurance</h2>
Another way to obtain health insurance for just a few years is to opt for a short-term health plan. You should only consider a plan like this if you are in good health, have no chronic medical conditions, rarely see a doctor and take few to no prescriptions. That&rsquo;s because coverage is minimal, and expenses above basic medical needs can add up quickly. In addition, you can be denied coverage for pre-existing medical conditions, since short-term health plans aren&rsquo;t covered under the Affordable Care Act (which no longer disqualifies people from coverage based on chronic health conditions).&nbsp;
While prices vary widely for short-term medical plans, most adults in their 50s and early 60s can expect to pay between $162 and $406&nbsp;per month. While that&rsquo;s a reasonable payment for health coverage, do keep in mind that these types of plans often come with very high deductibles; $5,000 to $10,000 or more. If you&rsquo;ve got a well-funded HSA, you could use some of the money you&rsquo;ve saved to assuage the cost of the deductible.4
 Short-term plans provide coverage up to one year, and can be renewed or canceled at any time.&nbsp;
<h2>Affordable Care Act (Obamacare)</h2>
The Affordable Care Act provides options for health care, but be prepared&mdash;the rates are not always so affordable. ACA premiums can vary from person to person but age is a top contributing factor.&nbsp; If you plan to retire between the ages of 60-64, the average monthly premium you can expect to pay for individual coverage is $771, without subsidies.5&nbsp;
Upon applying for ACA coverage, you&rsquo;ll need to provide your annual income amount to determine whether you&rsquo;ll qualify for premium credits. Premium credits can drastically reduce the amount you spend on healthcare in a month, but if you underestimate your income, you could get slapped with a hefty tax bill at the end of the year. That&rsquo;s what happened to Rhonda H.
<h3>Rhonda&rsquo;s Retirement Story</h3>
Rhonda H. promised her husband she&rsquo;d retire with him when she reached 65 or 66. However, after working 16 &frac12; years at her current company, she was forced to retire at 61 when a new management team took over. That left the couple without four to five years of income they had planned on having.
Since both she and her husband were insured under her company&rsquo;s plan, health insurance was a big concern. COBRA premiums were out of sight, as were those from private insurance companies.
&ldquo;Then an insurance agent quoted me a price of $495 a month for ACA insurance for both of us,&rdquo; says Rhonda. It seemed too good to be true, and it was. A year later, when filing her tax return, Rhonda was informed that she owed $9900 in penalties and back premiums for the ACA policy.
After checking with a tax attorney, Rhonda learned that the unscrupulous agent had entered lower income levels so he could quote a lower cost premium and make a sale.&nbsp;

As Rhonda&rsquo;s story shows, it&rsquo;s always better to overestimate than underestimate your income when filing for ACA insurance, and ensure you don&rsquo;t claim credits you&rsquo;re not eligible for. Advance premium credits, which lower premium rates, are based on income and taxable household size. Penalties apply if you underestimate your income and pay a lower rate.&nbsp;
ACA healthcare plans can be obtained during the annual enrollment process or when you have a qualifying life event (like a death or divorce).&nbsp;
If you&rsquo;re up in the air about how to manage healthcare in the early years of your retirement, visit our Healthcare in Early Retirement course to learn more about the options available to you, and which could be the best choice given your situation.

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Fidelity Releases 2022 Retiree Health Care Cost Estimate: 65-Year-Old Couple Retiring Today Will Need an Average of $315,000 for Medical Expenses.&rdquo; Businesswire, 16 May 2022,&nbsp; <a href="https://www.businesswire.com/news/home/20220516005224/en/">https://www.businesswire.com/news/home/20220516005224/en/</a>.&nbsp; Accessed 22 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2017 Employer Health Benefits Survey.&rdquo; KFF, 19 September 2017, https://www.kff.org/report-section/ehbs-2017-summary-of-findings. Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2022 Employer Health Benefits Survey.&rdquo; Kaiser Family Foundation, 27 October 2022, <a href="https://www.kff.org/report-section/ehbs-2022-summary-of-findings">https://www.kff.org/report-section/ehbs-2022-summary-of-findings</a>. Accessed 19 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Short-Term Health Insurance.&rdquo; eHealth, https://www.ehealthinsurance.com/short-term-health-insurance. Accessed 22 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;ACA Index Report on Unsubsidized Consumers.&rdquo; August 2021. <a href="https://news.ehealthinsurance.com/_ir/68/20217/ACA_Unsubsidized_Index_Report_2021.pdf">https://news.ehealthinsurance.com/_ir/68/20217/ACA_Unsubsidized_Index_Report_2021.pdf</a>. Accessed 22 December 2022.</li>
</ol>

Insurance is meant to protect you financially if a catastrophic event were to occur. And that&rsquo;s exactly what you need in retirement: financial protection. Here are two types of insurance to consider for this period of your life. And your early to mid-sixties isn&rsquo;t too late to start either of these.&nbsp;
<h2>Long-Term Care Insurance</h2>
Retiring in your early sixties should allow you many years to have fun, travel and learn new hobbies. But the fact of the matter is, there&rsquo;s a chance you&rsquo;ll need a nursing home or assisted living facility at some point later in your retirement. It&rsquo;s understandable to not want to think about this, but now is the time to figure out a plan for how you&rsquo;ll pay for that.&nbsp;
Estimates indicate that the average 2023 yearly cost to stay at a nursing home are upwards of $100,679. Assisted living facilities aren&rsquo;t much cheaper, clocking in around $57,288. Luckily, long-term care insurance can help offset these high costs, covering things like in-home care, palliative, hospice care, and Alzheimer&rsquo;s assistance as well.1&nbsp;
If that sounds too good to be true, that&rsquo;s partly the case. The cost of long-term care insurance is quite high for a low policy without any extra coverage. Estimates for the average 2022 annual premium for 60-year-olds are $1,175 for a male and $1,900 for a female. And a couple, both age 60, can expect an annual premium of $2,600. And that&rsquo;s just for a policy that would pay $165,000 without an inflation rider for long-term care expenses.2 For more coverage (which would likely be necessary), you can expect a much higher monthly premium&mdash;almost double. Additionally, if you&rsquo;re hoping to have a policy that protects against inflation, you&rsquo;ll need to include an inflation rider. That will increase your premiums quite a bit as well. While these policies can be pricey, it&rsquo;s a short-term sacrifice to ensure you&rsquo;re able to get the best care possible in the latter part of your retirement.
<h2>Life Insurance</h2>
Do you need life insurance in retirement? It&rsquo;s a common question with a relatively simple answer: if there&rsquo;s someone who depends on you for their welfare, like a disabled adult child or a younger spouse, you should have life insurance. And the decision to obtain life insurance shouldn&rsquo;t be taken lightly, since you&rsquo;ll pay more for a policy if you initiate it in your early 60s. The two main types of life insurance policies available to you are term life and whole life. Although both offer you peace of mind, one has a cheaper premium with a definite end date while the other can be used as another investment vehicle for the rest of your life at a higher monthly premium.
<h3>Whole Life Insurance</h3>
A whole life plan is a life insurance plan that lasts for your whole life. There&rsquo;s no need to worry about keeping track of when your plan ends; it&rsquo;s set up to end when you pass. If you opt for a whole life insurance plan, you&rsquo;ll choose between a permanent plan and a universal plan.&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Whole Life Permanent. With a permanent plan, your premiums stay the same each month (or year if you choose to pay your premiums annually).</li>
<li style="font-weight: 400;" aria-level="1">Whole Life Universal. If you have a universal plan, you&rsquo;ll enjoy flexible premiums that allow you to pay less or more depending on your financial situation. This type of plan requires a bit of extra discipline though; paying lower premiums for a long time sets you up for a larger bill later on, which isn&rsquo;t exactly beneficial as you approach retirement.</li>
</ul>
Whole life insurance is a lot more expensive than a term life policy because there are additional benefits that can be treated as another retirement savings vehicle. For example, there&rsquo;s a cash value component that grows tax-free over time. So if you&rsquo;ve already maxed out your traditional retirement accounts like 401(k) or IRA for the year, your whole life policy can be treated as another savings account. You can withdraw or borrow against your cash value but if you don&rsquo;t repay the money, your death benefit reduces. Unlike term life, there&rsquo;s a guaranteed death benefit for your beneficiaries and some policies may offer dividends.&nbsp;
If you&rsquo;re looking to use a whole life policy for extra cash cushion, try a smaller policy. You&rsquo;ll still be able to get all whole life insurance benefits at a lower premium. Policies can range anywhere from $10,000 to millions.3&nbsp;
<img src="https://cdn.buttercms.com/8S3BZ9KeTeKNmWkUkV8Q" alt="Lesson5_ whole life insurnace.png" />
<h3>Term Life Insurance</h3>
Unlike whole life, term life insurance lasts for a finite amount of time. Most policies last 10 or 20 years, after which you have to sign up for a new policy or go without coverage. And if you purchase a term life policy in your 60s, the terms available are usually only 10 or 20 years. While term life is less expensive to purchase than whole life, it doesn&rsquo;t have the whole life benefits like cash value accumulation, dividends, and guaranteed death benefit. If your term life policy expires, you (and your family) don&rsquo;t have access to any benefits. Keep in mind that starting a new policy becomes more expensive as you age, which is a drawback of term life insurance.4
<img src="https://cdn.buttercms.com/hBgA79xhQhSvB7MeV1N8" />
For most, life insurance is necessary to help decrease the financial burden on your family as you pass. It provides your beneficiaries a lump sum to pay for final arrangements, any debt you&rsquo;ve racked up (think loans or hospital bills), peace of mind and financial security.

<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Cost of Long Term Care by State: Cost of Care Report.&rdquo; Genworth, www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2022 Long-Term Care Insurance Information.&rdquo; American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2022.php. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">Bibey, Chris. &ldquo;How Much Does Whole Life Insurance Costs? Rates &amp; Charts.&rdquo; Top Whole Life, 24 Janaury 2022, https://topwholelife.com/whole-life-insurance-faqs-much-whole-life-insurance-cost. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Term Life Insurance Quotes.&rdquo; Quotacy, https://www.quotacy.com/term-life-insurance-quotes. Accessed 23 December 2022.</li>
</ol>

If you&rsquo;ve had a long-time goal of retiring in your early sixties before your government benefits kick in, you&rsquo;re probably like 55% of all workers in the workplace who participate in a retirement plan, like a 401(k), an IRA and a pension plan.1 In this lesson, we&rsquo;ll take a deeper look at the rules and regulations you&rsquo;ll face when it comes to withdrawing money from your investment accounts. Here&rsquo;s what you need to know as you approach retirement.
<h2>Average Retirement Savings for 60- to 64-Year-Olds</h2>
The first thing on your mind if you&rsquo;re hoping to retire at 60 is likely money. And rightfully so. According to the 2019 Federal Reserve SCF data, the average retirement savings in the U.S. for ages 60 to 64 is $408,420. The median retirement savings for that same age group is $134,000. As you can see from our example above, these numbers aren&rsquo;t quite high enough to support a retirement that could still span two to two and a half decades. At these savings levels, Bob and Ellen would likely run out of money far before they stop needing it, even with their Social Security income. But, there are other factors, like equity in your home, the ability to cut back and live on less, and inheritance that could positively impact your nest egg.2, 3&nbsp;&nbsp;
Whether your savings are in line with these averages or much higher or lower, establishing a budget is a crucial first step to take before retiring. Start closely tracking your spending (aim to do this for a few months, but the longer the better!) and get familiar with where your money is going. Then, decide whether and where you can cut back if you need to. Remember to consider not only income but also things like taxes (more on that later), healthcare premiums and extras that can pop up from time to time, like car repairs or home maintenance fees.&nbsp;
<h2>401(k)</h2>
The average 401(k) balance for people in their sixties is $182,100.4 But the reality is that you&rsquo;ll likely need much more than that if you&rsquo;re going to retire between 60 and 64 and draw income for the rest of your life. The exact amount varies widely based on your individual needs.&nbsp;
If you&rsquo;re holding on to a robust 401(k) with more than enough money to sustain your plans for an early retirement, you&rsquo;ll be glad to know that at age 60, you&rsquo;re finally able to make penalty-free withdrawals from your 401(k). That privilege begins at age 59 &frac12;, and helps you avoid costly tax penalties associated with an early withdrawal from your account.&nbsp;&nbsp;
If you&rsquo;ve entered your sixties feeling comfortable about the amount you have in your 401(k), give yourself a pat on the back. If, however, they fall short of these amounts, it may be to your advantage to work for a few more years in order to take advantage of catch-up contributions. The total allowable catch-up contribution is $7,500 per year above and beyond the $22,500 limit for 2023. That means starting at age 50, you can contribute a total of $30,000 to your 401(k).&nbsp;
So hanging on for just a few more years could potentially increase the balance of your 401(k) to a number that allows you to live comfortably on your investment for the rest of your life. And if you&rsquo;re reading this several years before you turn 60, this is definitely something to include in your retirement plan to leave the workforce in your early sixties. Ten to fifteen years of increased contributions are sure to help boost your 401(k) balance. 
<h2>IRA</h2>
Hopefully, you&rsquo;ve saved additional money in an IRA if you&rsquo;ve had a goal of retiring early at the age of 60. An IRA, whether Traditional or Roth, is an invaluable tool when it comes to boosting your retirement portfolio. Despite the fact that IRAs are and have always been subject to a contribution maximum, the compounding interest you could grow through decades of saving can become an invaluable asset for retirement.
When it comes to consequences for early withdrawal, your IRA functions similarly to your 401(k). By the time you reach age 60 (59 &frac12;&nbsp; to be exact), you can tap into your savings without having to worry about a penalty for early withdrawal. However, keep in mind that the money you pull from your Traditional IRA will be considered taxable income.&nbsp;
If you&rsquo;re 60 or 61, you can contribute a maximum of $6,500 to your IRA. In another year, at 62, you can increase your contribution to $7,500. And, thanks to the SECURE Act of 2019, you can continue contributing to either IRA past the age of 72, but it must be from earned income only&mdash;not pensions, dividends, etc. Note: A spouse can make IRA contributions into their IRA account as well as their retired spouse&rsquo;s IRA account as long as the total contributions do not exceed their income.5
Despite the fact that IRAs are and have always been subject to a contribution maximum, the compounding interest you could grow through decades of saving can become an invaluable asset for retirement.
<h2>Roth Conversions</h2>
Do you know what your future tax rate will be once you retire? If you think it might stay the same or increase, then you should look into converting your investments into a Roth IRA to save you on taxes in your retirement. As a reminder, you&rsquo;ll be subject to Required Minimum Distributions (RMDs) once you hit 73 (or 72 depending on your birth year) and by converting qualified RMD accounts like IRAs and 401(k)s into a Roth IRA, you&rsquo;ll not be subject to RMDs and have tax-free withdrawals.
There&rsquo;s no limit on how much money you can convert to a Roth IRA but it will increase your taxable income which could bump you into a higher tax bracket.&nbsp;
Here&rsquo;s a tip: consider spreading your conversions over time if your income stays relatively the same year over year. This will ensure you don&rsquo;t get a big tax bill by converting all at once.
<h2>Pension</h2>
If you earned a pension during your working years, it&rsquo;s yet another tool that can get you closer to your goal of retiring in your early 60s. While state pensions don&rsquo;t start paying out until you reach age 66, you can withdraw money from most workplace or personal pensions when you turn 55.&nbsp;
You can withdraw money from your pension as a lump sum or a monthly payout. Here are some pros and cons of each withdrawal method:6
<h3>Lump Sum</h3>
<img src="https://cdn.buttercms.com/8UwyLvqzTW7rvWfjDc5l" alt="undefined">
<h3>Monthly Payment</h3>
<img src="https://cdn.buttercms.com/Ds7YkAkUTnulVLvTRyXm" alt="undefined">
One way to support an early retirement is to take the money as a lump sum payout and invest it in an ETF or mutual fund to let it continue to grow. This strategy is best if you have experience managing your own investments.&nbsp;&nbsp;
&nbsp;
<h4>SOURCES:&nbsp;</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;National Compensation Survey: Employee Benefits in the United States, March 2020.&rdquo; U.S. Bureau of Labor Statistics, September 2020, https://www.bls.gov/ncs/ebs/benefits/2020/employee-benefits-in-the-united-states-march-2020.pdf. Accessed 10 August 2021.</li>
<li style="font-weight: 400;" aria-level="1">Benson, Alana. &ldquo;The Average Retirement Savings by Age and Why You Need More.&rdquo; NerdWallet, 24 June 2022, https://www.nerdwallet.com/article/investing/the-average-retirement-savings-by-age-and-why-you-need-more. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Average Net Worth by Age plus Median, Top 1%, and All Percentiles.&rdquo; Don&rsquo;t Quit Your Day Job, https://dqydj.com/average-median-top-net-worth-percentiles-by-age. Accessed 10 August 2021.</li>
<li style="font-weight: 400;" aria-level="1">Milena. &ldquo;Average 401k Balance by Age - Stats &amp; FAQs.&rdquo; BalancingEverything, 21 November 2022, https://balancingeverything.com/average-401k-balance-by-age. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">Benz, Christine. &ldquo;You Can Now Make IRA Contributions at Any Age. But Should You?&rdquo; Morningstar, 13 February 2020, https://www.morningstar.com/articles/966490/you-can-now-make-ira-contributions-at-any-age-but-should-you. Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Pension Questions: Should I Take a Lump Sum?&rdquo; StateFarm, https://www.statefarm.com/simple-insights/retirement/pension-questions-should-i-take-a-lump-sum-offer. Accessed 30 July 2021.</li>
</ol>

At age 62, you&rsquo;re first eligible to begin receiving your Social Security benefits. But we advise you to keep in mind that the earlier you start benefits, the less you&rsquo;ll receive each month. And it&rsquo;s a substantial reduction; your benefits at age 62 are as much as 30% lower than those you&rsquo;d receive once you reach your full retirement age, which for most retirees is somewhere between 66 and 67.&nbsp;
Once you reach age 62, if you are married or were married, you may be eligible to apply for spousal Social Security benefits that equal up to 50% of benefits received by your spouse or ex-spouse. The exact amount depends on your age, work history and marital status.
If your spouse dies, you may be eligible to receive a survivor&rsquo;s benefit of 100% of the benefits your spouse was receiving.
To learn more about the best election strategy for you based on your marital status, visit our Retirement School course, &ldquo;<a href="https://www.silvur.com/retirement-school/social-security-101">Social Security 101.</a>&rdquo; Then, visit our Social Security calculator for a personalized recommendation on what age is best for you to elect your Social Security benefits.

Any retirement budget should include taxes, since you&rsquo;ll still be on the hook to pay some taxes even after you exit the workforce. Here&rsquo;s what you need to know about taxes in retirement.&nbsp;
<h2>Taxes on Social Security Benefits</h2>
When putting together your retirement strategy that involves leaving the workforce in your early 60s, don&rsquo;t forget to account for taxes on your Social Security benefits. The federal tax rate on Social Security benefits is based on your combined income. You can determine your combined income by adding the following: Your adjusted gross income + nontaxable interest + &frac12; of your Social Security Benefits.
If your combined income is:
<ul>
<li style="font-weight: 400;" aria-level="1">$34,000 or more ($44,000 or more if you&rsquo;re married filing jointly), up to 85% of your benefits will be subject to federal tax.</li>
<li style="font-weight: 400;" aria-level="1">Between $25,000 to $34,000 (or between $32,000 and $44,000 as a joint filer), you&rsquo;ll be taxed on 50% of your benefits .&nbsp;</li>
</ul>
And if you live or are planning on moving to any one of these 12 states -&nbsp; Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont and West Virginia - note that these states also tax your Social Security income. For state-specific information, visit our State Taxes on Social Security lesson.&nbsp;
<h2>Taxes Based on Location</h2>
Thinking of relocating during or before retirement? Be sure to factor taxes into your decision. After all, your new location may have a big factor on your taxes. Consider differences in cost of living and healthcare expenses, as well as federal and state taxes. And if you plan to leave an estate, that money could also be taxed federally and at the state level if you&rsquo;re residing in a state that allows this. And that&rsquo;s the same if you receive an inheritance as well.&nbsp;
To learn more, check out our class, &ldquo;<a href="https://www.silvur.com/retirement-school/how-location-impacts-taxes" rel="follow noopener" target="_blank">How Location Impact Taxes.</a>&rdquo;&nbsp;There, you can dive deeper into each state&rsquo;s individual tax situation as well as any special tax deductions for older Americans. Then, go to our Cost of Living calculator to compare different tax rates and see how moving impacts your Retirement Score.
<h2>Taxes on Investment Accounts</h2>
Once you&rsquo;re finally retired, you&rsquo;ll likely turn to those tax-deferred retirement accounts you&rsquo;ve been working so hard to beef up over the years. Once you do, remember that you&rsquo;ll be taxed on any withdrawals you make. The amount will count as ordinary income in the year it&rsquo;s withdrawn, though at this age, there are no other penalties to worry about.&nbsp;
These tax-deferred accounts, like a traditional 401(k) or 403(b), SEP, or traditional IRA, are subject to Required Minimum Distributions (RMDs), which are yearly amounts you&rsquo;re forced to take once you turn 73 (or 72 if you were born before December 31, 1950). RMDs are also treated as taxable income.
If your money is sitting in a Roth account, it can continue to grow untouched, and thanks to the SECURE Act, you can even continue contributing to it. But don&rsquo;t forget to assign a beneficiary to your Roth IRA, your beneficiary can inherit 10 years of tax-free distributions.
<h2>Tax Strategies to Help You Save Money</h2>
Yes, taxes are definitely part of retirement. And one thing you may not have considered is the order in which you&rsquo;ll start drawing down your retirement accounts. But chances are you&rsquo;ve got money in both taxable and non-taxable accounts, so you can actually minimize the impact to your taxes by putting together a savvy withdrawal strategy.&nbsp;
How do you know which withdrawal strategy to employ? It depends mostly on the goals you have. Below, we&rsquo;ve taken an excerpt from our Taxes in Retirement course as a reference. Here, you&rsquo;ll be introduced to three popular methods of withdrawal sequencing, depending on what your goals are.
Taxable First, then Tax-Deferred
<ul>
<li style="font-weight: 400;" aria-level="1">Withdraw from taxable accounts first (Social Security, annuities, other forms of earned income)</li>
<li style="font-weight: 400;" aria-level="1">Then start to draw down tax-deferred accounts (401(k)s, traditional IRAs, etc.)</li>
<li style="font-weight: 400;" aria-level="1">Leave the tax-exempt accounts (Roth IRA or Roth 401(k)) for last</li>
</ul>
Doing this allows you to potentially benefit from a lower tax rate and prioritizes leaving an inheritance for your heirs. Here, accounts with RMDs are tapped early on.
Taxable First, then Tax-Exempt:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Draw down taxable accounts first, like the first method,&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Then draw down the tax-exempt accounts (your Roth accounts),&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Finally, start drawing on the tax-deferred accounts (401(k)s, etc.).&nbsp;</li>
</ul>
This method reduces your tax bill throughout retirement and can make sense if you anticipate a lower tax rate in the future when you start drawing from the tax-deferred accounts since those withdrawals will be counted as income.&nbsp;
Tax Bracket Management:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Start with your tax-deferred accounts (e.g., IRA &amp; 401K accounts) first, but only up to a specific tax bracket (e.g. 12%, 22%, etc),</li>
<li style="font-weight: 400;" aria-level="1">Then withdraw from taxable accounts,</li>
<li style="font-weight: 400;" aria-level="1">Leave tax-exempt funds for last.&nbsp;</li>
</ul>
This method prioritizes passing your estate to your heirs and may be a good strategy if you expect a higher tax rate in the future. However, staying within a preferred tax bracket requires a bit of tax knowledge.
<h2>Taxes on Inherited Accounts</h2>
You may have inherited accounts from your parents or relatives - it&rsquo;s a great way to add to your nest egg. But there are some tax considerations that come along with it. Typically, any inherited accounts are still subject to RMDs and must be distributed within a 10-year period. These inherited accounts, outside of Roths, count as taxable income and can bump you into a new tax bracket. And depending on where you live, you may incur state taxes, too. If you don&rsquo;t want to deal with the taxes and responsibilities of real property or creditors, you have an option to disclaim an inheritance. To understand all the tax liabilities and rules that come with an inheritance, go to our course &ldquo;<a href="https://www.silvur.com/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement</a>&rdquo; to get a deeper understanding.

Are you ready for this exciting next chapter of your life? In this lesson, you&rsquo;ll meet a real-life retiree to give you a better idea of your readiness. Here&rsquo;s Harry&rsquo;s story - he&rsquo;s a retiree who successfully exited the workforce at 60 along with his wife.&nbsp;
<h2>Retirement at 60 to 64: A Real-Life Story</h2>
Harry B. had just turned 60 when he was offered a retirement package from his company. As attractive as retirement sounded, he and his wife weren&rsquo;t sure their financial situation could support it.
They sat down and reviewed a list of their expenses and assets, and weighed that information against their retirement dreams. &ldquo;Our vision for retirement meant boating and fishing, frequent cruises, vacations and no financial worries.&rdquo;
Harry weighed the buy-out options his company offered him&mdash;one lump sum or monthly payments for life. Choosing one lump sum, the couple invested it in a portfolio with a projected 5-6% yield. Even with investments, 401(k)s, IRAs, stocks, his wife&rsquo;s pension, equity in their house and fairly low debt, they fell short of what they needed to retire and maintain their current lifestyle. So they chose to move to an area with lower cost of living and cut out excess spending.&nbsp;
&ldquo;We either had to bring in more money or cut expenses&mdash;or both,&rdquo; says Harry. Taking advantage of the housing boom in Austin, Texas, they sold their house for a nice profit and relocated to Florida where they got more house for the money, paid lower taxes and lived on the water.&nbsp;
To cut spending, they sold one of their two cars, cancelled their landline phone, opted for streaming instead of pricey cable TV, shopped around for the best rates for car and home insurance and cell phone plans, kept the company health insurance (the increased premium still beat the competition in the private market), and pretty much eliminated frivolous spending.&nbsp;
That brought them to the magic number they needed. Retired for 11 years, they are living proof that it&rsquo;s possible to retire with less than the optimal amount of money if you&rsquo;re willing to cut spending and live a simpler lifestyle.
In Harry&rsquo;s case, he noticed that he could meet his retirement goals in his 60s by lowering his cost of living. If you want to see how much of an impact where you live has on your ideal retirement age, compare zip codes at Silvur&rsquo;s Cost of Living calculator. It compares healthcare costs, income taxes, and expenses. Then, in your Retirement Score, adjust your spending to find the right Retirement Score that gets you to your goal. These adjustments to your life have a big impact on your retirement finances, especially if you want to retire in your early 60s.

Even though the exact amount you need to retire varies from person to person, there are some universal factors to consider when planning for retirement. Check out the list below.
<ol>
<li style="font-weight: 400;" aria-level="2">&nbsp;If you want to retire in your early sixties, check your Retirement Score. </li>
<li style="font-weight: 400;" aria-level="2">Live lean&mdash;below your means&mdash;and invest the money you save toward your retirement. </li>
<li style="font-weight: 400;" aria-level="2">Test-drive your retirement budget for six months before you retire. Adjust it as needed. </li>
<li style="font-weight: 400;" aria-level="2">Plan out your income and withdrawal strategy that align with your goals. </li>
<li style="font-weight: 400;" aria-level="2">Set up an emergency fund with enough money to cover six months to one year of expenses. </li>
<li style="font-weight: 400;" aria-level="2">Make it a priority to pay off your mortgage before retiring. A mortgage-free house will be a gold mine when you retire. Maintain it well. If it&rsquo;s available where you live, investigate when you can apply for a freeze on property assessments. </li>
<li style="font-weight: 400;" aria-level="2">If you think you might want to live out your retirement in a different location, consider moving before retirement so it&rsquo;ll be easier to obtain a mortgage. This also allows you to ensure you like the area you&rsquo;ve chosen. </li>
<li style="font-weight: 400;" aria-level="2">Make a plan for health insurance coverage until you&rsquo;re 65. Familiarize yourself with all parts of Medicare. </li>
<li style="font-weight: 400;" aria-level="2">Make or update your will. Appoint a healthcare power of attorney. Draw up advance directives including a living will and organ donation specifics. Check into pre-paid funeral plans along with the insurances discussed in the earlier lesson &ldquo;Long-Term Care and Life Insurance.&rdquo; </li>
<li style="font-weight: 400;" aria-level="2">Store important papers&mdash;wills, deeds, mortgages, investments, etc. &mdash; in one safe place. Tell a trusted family member of its location.</li>
</ol>

Now that you have a better idea of what it takes to retire in your early to mid-sixties, it&rsquo;s time to employ a strategy that works for you. 
As a first step, get your Retirement Score. You&rsquo;ll be able to play out different scenarios to see what you can do to extend your Score based on your planned retirement age, Social Security election age, expenses, net worth, and healthcare costs.&nbsp;
Then, check out our Healthcare calculator to see how much your Medicare costs will add to your Score. And our Social Security calculator will show you the best age to elect Social Security benefits. Finally, our Cost of Living calculator will help you see how you could potentially increase your Score by moving to a lower cost of living area.

You’ve reached your early sixties. That means you’re definitely eligible for retirement - if you can afford it. Are you in good shape to retire? Here’s a look at how you compare to others your age. 

Retiring by the age of 65 requires some planning and forethought, but it's entirely possible if you make the right moves. In this course, you&rsquo;ll find all the steps you can take to retire when you're ready, as well as the apps and tools you can use to ease the transition.

While the standard retirement age may technically be 65, research shows the percentage of individuals working or looking for work beyond that age may be on the rise. In fact, recent data from the Bureau of Labor Statistics shows adults ages 65 and older are twice as likely to be working in 2026 than they were in 1996.1
Today&rsquo;s older workers tend to be more educated and higher-earning than those who were working during their golden years several decades ago, they note. But perhaps you&rsquo;re still in the workforce because you have to be, even if you don&rsquo;t really want to be.&nbsp;
If your goal is retiring by the age of 65, or at least by the age of 70, there are steps you can take now to improve your chances at reaching this important milestone. In this class, you'll learn what you can do now to retire when you're actually ready, with important details shared on the following topics:
<ul>
<li style="font-weight: 400;" aria-level="1">Retirement Planning Early: Find out which steps you can take now so you can retire by the age of 65.</li>
<li style="font-weight: 400;" aria-level="1">Healthcare: If you retire in your mid to late sixties, you won&rsquo;t have to find insurance if you don&rsquo;t want to, since you&rsquo;re eligible for Medicare. Find out the basic facts about Medicare and how it can help you retire.</li>
<li style="font-weight: 400;" aria-level="1">Investments: Explore potential investment strategies, including strategies for drawing down your funds.</li>
<li style="font-weight: 400;" aria-level="1">Benefits: Learn how to maximize the benefits you&rsquo;ve worked hard to earn.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Taxes: Find out how to legally minimize taxes before and during retirement.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Checklist: Look over our retirement checklist so you can know for sure if you&rsquo;re ready.</li>
</ul>
<h4>Sources</h4>
<ol>
<li>&ldquo;Labor Force Participation Rate for Workers Age 75 and Older Projected to be Over 10 Percent by 2026.&rdquo; U.S Bureau of Labor Statistics, 29 May 2019, www.bls.gov/opub/ted/2019/labor-force-participation-rate-for-workers-age-75-and-older-projected-to-be-over-10-percent-by-2026.htm. Accessed 20 August 2021. </li>
</ol>

Retirement would be simple if there was a magic number everyone should save that would allow them to retire in comfort and never have to worry about money again. But today more than ever, that&rsquo;s simply not the case. And that&rsquo;s exactly why we created the Retirement Score; it&rsquo;s an innovative approach to determining how long your money should last based on individual factors like your age, how much you&rsquo;ve saved, when you&rsquo;ll be electing your Social Security benefits, and more.&nbsp;
<h3>Example:&nbsp;</h3>
Bob and Ellen are a married couple who have been saving for decades, but put off retirement until they reached 65 because they didn&rsquo;t want to have to worry about healthcare outside of Medicare. They make a combined annual salary of $120,000&mdash;$60,000 each&mdash; and plan to start collecting benefits at age 65.&nbsp;
Here, you can see that if Bob and Ellen&rsquo;s years of careful saving and a later retirement date equated to savings of $500,000, they would be able to spend up to $6,000 per month without worrying much about running out of money (it would last to just over the age of 100 at that spending rate).&nbsp;
If they choose to spend $7,000 per month, their Retirement Score will decrease to 86 years. At that monthly spending level, Bob and Ellen will need to have saved $1,000,000 in order to avoid running out of money.&nbsp;
<img src="https://cdn.buttercms.com/4TjtgzyQ20FhDOZSVqTw" alt="Lesson 2.png" />
Note: We assume that Ellen and Bob are calculating their Retirement Score at age 55. The maximum Retirement Score for a 55-year-old is 135 years.&nbsp;
Your monthly spend has a direct correlation to your net worth. If you spend lavishly, you&rsquo;ll impact your savings and decrease the longevity of your net worth. That&rsquo;s why it&rsquo;s helpful to understand what your Retirement Score is and how much you can actually afford when you retire.

You want time to enjoy life after retirement, even if you choose to work into your late sixties. You probably have peers who have been enjoying retirement, and now it&rsquo;s your turn! But before you say goodbye to full-time employment, you should take the following steps to ensure your finances are in order.&nbsp;
<h2>1. Establish a Budget</h2>
No matter your age, you shouldn&rsquo;t retire until you&rsquo;ve set up a budget for this next chapter of your life. You know your financial situation will look different, so proper planning is the best way to be successful. A simple way to set a retirement budget is to come up with a total monthly spending amount, just like Bob and Ellen saw in the example in our lesson entitled, &ldquo;How Long Your Savings Will Last By Budget.&rdquo; As you work on your budget, you can compare it to your Retirement Score to get an idea of how long your savings will last based on your monthly budget.
Without any additional money coming in, like end-of-year bonuses, holiday payouts, or extra paycheck months, your budget for your retirement years should cover absolutely all of your expenses. That means you&rsquo;ll need to factor everything from large expenses like healthcare, and smaller ones that can sneak up and bust your budget, like cost-of-living adjustments. It&rsquo;s always good to live below your means so you can build an extra cushion for unexpected expenses. At Silvur, we recommend nailing your budget down at least six months before you stop working so that you can take the final six months of your employment to test-drive your budget and make tweaks wherever necessary.&nbsp;
<h2>2. Maximize Contributions to Retirement Accounts</h2>
In the years prior to retirement (if you haven&rsquo;t been doing so all along), you should make sure you're maximizing employer-sponsored retirement plans that may be available to you (i.e. 401(k) plans, a 403(b), etc.). Doing so can help you make the most of your final years of retirement growth, but don't forget that contributing to tax-advantaged retirement accounts can also lower your taxable income.
How much can you save? That depends on the type of retirement plan you're using. And keep in mind that the maximum amount is typically increased every few years. As an example, the maximum deferred contribution for a 401(k) plan in 2023 is set at $22,500. And with the recent passage of the Secure Act, you can now continue to save in either a traditional or a Roth IRA, and even a 401(k),&nbsp; regardless of age. Previously, the upper age limit for contributions to these accounts was 70 &frac12;.1
Note: If you're self-employed, you'll also want to maximize any tax-advantaged retirement plans you may be using, such as a SEP IRA or a Solo 401(k).
<h2>3. Utilize Catch-up Contributions</h2>
Anyone age 50 or older (with no upper age limit) can boost contributions to certain retirement accounts with what is known as a "catch-up contribution." With catch-up contributions, you can contribute an additional $7,500 to a 401(k) plan in 2023, for a total contribution of $30,000 each year. This is crucial to remember if you&rsquo;re approaching your target retirement age but feel like your savings amount is lagging behind. 
<h2>4. Contribute to IRAs or individual accounts&nbsp;&nbsp;</h2>
You can also contribute to an IRA in addition to other retirement plans. In 2023, the basic contribution limit to both a traditional IRA and a Roth IRA is capped at $6,500, although individuals ages 50 or older can contribute an additional $1,000 in catch-up contributions for a total annual limit of $7,500.2
<h2>5. Cut Expenses</h2>
As you plan to retire between ages 65 and 70, keep in mind that the amount of assets you need is directly correlated to how much you spend. Generally speaking, this means you can retire earlier if you can find a way to cut your expenses.&nbsp;
How can you spend less each month? Consider these tips:
<ul>
<li style="font-weight: 400;" aria-level="1">Keep unsecured debt (i.e. credit card debt) at a minimum</li>
<li style="font-weight: 400;" aria-level="1">Use a monthly budget or spending plan and stick to it. Do a dry run for a few months and see what you need to adjust or tweak.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Create a food plan and grocery list each week</li>
<li style="font-weight: 400;" aria-level="1">Compare cable and phone plans to find the best deal</li>
<li style="font-weight: 400;" aria-level="1">Use public transportation instead of driving</li>
<li style="font-weight: 400;" aria-level="1">Take advantage of discounts for seniors, like prescription drug cards that can help pay for medication.&nbsp;</li>
</ul>
<h2>6. Choose the Right Healthcare Plan</h2>
Affording healthcare before Medicare kicks in is difficult, which is what makes 65 such a great age to retire - you&rsquo;re finally eligible for Medicare three months before you turn 65. Be sure to do your research on the program before you retire, so you can ensure you sign up for the parts you need most (and on time - penalties apply for late enrollment!). Even if you don&rsquo;t yet need much medical coverage, or you&rsquo;re considering delaying because you&rsquo;re covered by your younger spouse who&rsquo;s still working, you&rsquo;ll need and want Medicare at some point, so it&rsquo;s good to know as much as possible.&nbsp;
If you&rsquo;re planning your Medicare enrollment strategy, don&rsquo;t forget to complete our <a href="https://www.silvur.com/retirement-school/category/medicare" rel="follow noopener" target="_blank">Medicare</a>&nbsp;classes in the Retirement School. There, we lay out all the different parts, the costs, and the rules you need to know before you enroll.&nbsp;
<h2>7. Estate Planning</h2>
Estate planning is an incredibly broad subject to broach when you're looking forward to retirement, yet there are some simple steps nearly everyone should take. For example, you should plan to:
<ul>
<li style="font-weight: 400;" aria-level="1">Take an inventory of your possessions and create a basic will and testament</li>
<li style="font-weight: 400;" aria-level="1">Choose an executor you trust to follow your final wishes</li>
<li style="font-weight: 400;" aria-level="1">Update beneficiaries on your retirement accounts, bank accounts and life insurance policies&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Create a living will that dictates what happens to you if you're alive but not longer able to speak for yourself</li>
<li style="font-weight: 400;" aria-level="1">Pre-plan for your funeral and final disposition</li>
</ul>
While you can hire an attorney to help you write a will and testament as well as a living will, it's possible to take care of some of this on your own using an online tool that provides legal documents. While having a will does not necessarily mean your beneficiaries will avoid probate, it does increase the likelihood of your assets being handed off based on your preferences.&nbsp;
<h2>8. Look into Long-term Care Insurance and Life Insurance</h2>
Are you covered in the event of an unforeseen health crisis? It&rsquo;s never too late. Long-term care insurance is expensive but can offset the high costs you&rsquo;ll face if you or your partner ever needs nursing home or assisted living care. And life insurance can provide you with additional security as well. Learn more about both of these types of insurance in our clases dedicated to <a href="https://www.silvur.com/retirement-school/category/long-term-care-and-life-insurance">Long-Term Care and Life Insurance</a>. 
<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Retirement Topics - 401(k) and Profit-Sharing Plan Contribution Limits.&rdquo; IRS, 25 October 2022. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Retirement Topics - IRA Contribution Limits.&rdquo; IRS, 21 December 2022. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits. Accessed 23 December 2022.</li>
</ol>
</li>
</ol>

The good news for those turning 65 is the fact you're finally eligible for Medicare, or the federally run health insurance plan for the retired. There are three main components of Medicare you should know about:1
<ul>
<li style="font-weight: 400;" aria-level="1">Original Medicare: This comprises both Medicare Parts A and B. Medicare Part A, which is hospital insurance, covers inpatient hospital care, skilled nursing facility care, hospice care and more. Medicare Part B is the medical insurance part of Medicare. This coverage applies to some doctor's visits, medical supplies, outpatient care, preventative services and more.</li>
<li style="font-weight: 400;" aria-level="1">Medicare Part D and Medigap: These are &ldquo;a la carte&rdquo; plans or supplemental coverage to Original Medicare. Medicare Part D covers prescription drugs, and Medigap, which you can think of as coverage for &ldquo;miscellaneous&rdquo; expenses like deductibles and coinsurance payments. Medicare Part D can also cover required or recommended shots and vaccines.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Medicare Advantage: This is an all-in-one solution that gives you the full scope of coverage offered by Original Medicare and Part D. Note that Medicare Advantage typically has more limitations on your choice of doctors.</li>
</ul>
Most people do not pay a premium for Medicare Part A, although you may pay up to $506 per month for Medicare Part A if you haven&rsquo;t paid Medicare taxes while working. Meanwhile, everyone pays a premium for Medicare Part B. In 2023, the standard Part B premium amount is $164.90 per month.2 
As a side note, you may have heard of Medicare Advantage, which is an "all in one" alternative to regular Medicare. If you opt for Medicare Advantage, you'll be able to purchase a bundle of services and coverage that includes Part A, Part B and potentially Part D. Some Medicare Advantage plans also cover "extras" like dental and vision.&nbsp;
While you can delay enrolling in Medicare at the age of 65 if you have other coverage, this is usually not the best move, particularly when it comes to Part A. Most people have paid enough toward Medicare taxes so they will not be charged a premium for Part A, so there is no reason to delay.
However, there are times it can make sense to delay enrolling in part B. For example, if you have health insurance for medical care separately through your job or a spouse, it can make sense to maintain that coverage and delay paying for Part B of Medicare until you're ready. Just be sure to understand the rules and see if it makes financial sense to delay: you&rsquo;ll pay a life-long penalty (yes, you read that correctly) if you avoid signing up on time.3
Get a better understanding of Medicare by reading all of the classes in our Medicare Retirement School course.&nbsp;
<h4>Sources:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;What&rsquo;s Medicare?&rdquo; Medicare.gov. https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare. Accessed 20 August 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Medicare Costs at a Glance.&rdquo; Medicare.gov. https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Employer Community.&rdquo; CMS.gov, 11 February 2020. https://www.cms.gov/Outreach-and-Education/Find-Your-Provider-Type/Employers-and-Unions/Employer-community. Accessed 20 August 2021.</li>
</ol>

It can be difficult to determine whether or not to purchase insurance as you prepare for retirement. When you&rsquo;re trying to streamline your budget, the last thing you want to do is pay for something you might not need. But there are two types of insurance that can actually bring financial security during retirement: long-term care insurance and life insurance. Here, we&rsquo;ll take a look at each type so you can make an informed decision about whether these two types of insurance might be right for you.&nbsp;
<h2>Long-Term Care</h2>
Long-term care insurance is a type of insurance coverage that is designed to pay for the overwhelming costs of long-term healthcare, such as skilled nursing care or nursing home care. This coverage is commonly purchased with the goal of protecting financial assets. After all, the average cost of a private nursing home is currently over $9,584 per month in 2023.1 Without long-term care insurance, this expense could deplete even a healthy retirement account over the span of a few years.
Most people purchase long-term care insurance between the ages of 50 and 65, even though most people never use this coverage until they're in their eighties.2 This is important to note since long-term care insurance is expensive. Buying coverage earlier in life can mean securing lower monthly premiums, but it also means you could be paying on your policy for decades before you're in a position to use it.
The cost of long-term care insurance is quite high for low coverage: estimates for the average 2022 annual premium for 65 year olds are $1,700 for a male and $2,700 for a female with a $165,000 policy and no inflation protection. And a couple, both age 65, can expect an annual premium of $3,750. For more coverage (which would likely be necessary), you can expect a much higher monthly premium&mdash;almost double. Additionally, if you&rsquo;re hoping to have a policy that protects against inflation, you&rsquo;ll need to include an inflation rider. That will increase your premiums quite a bit as well. While these policies can be pricey, it&rsquo;s a short-term sacrifice to ensure you&rsquo;re able to get the best care possible in the latter part of your retirement.3
<img src="https://cdn.buttercms.com/1WcAx49kSGC2LjsRl5JZ" alt="Lesson 6.png" />
On the flipside, waiting too long to purchase long-term care insurance can also leave you with limited options. Unlike health insurance that is required to accept everyone regardless of pre-existing conditions, long-term care insurance companies hand pick who is approved or denied.&nbsp;
Around half of applicants ages 70 or older who applied for long-term care insurance were denied coverage in 2021, compared with about 38% of those ages 65 to 69.4
<h2>Life Insurance</h2>
If you haven&rsquo;t already purchased a life insurance policy, or your term-life policy has lapsed, you&rsquo;ll want to carefully evaluate whether you need to purchase a life insurance policy at this age. Unfortunately, any policy you shop for will be quite expensive, since the chance of developing a health issue increases as you age. If you&rsquo;re in your upper sixties to early seventies, Guaranteed Universal Life Insurance (referring to as GUL), is widely considered the best type of life insurance for you.&nbsp;

This no-frills type of coverage offers a guaranteed death benefit at the time of your passing. And since there&rsquo;s no cash value offered (you can&rsquo;t take a loan or withdrawal against a guaranteed universal life policy), policies tend to be far less expensive than other types, especially as you reach your older years. You can use GUL insurance to&nbsp; pay for final expenses, or to ensure a small nest egg for survivors, and you're guaranteed to be approved without a medical exam.5&nbsp;
<img src="https://cdn.buttercms.com/FVNjBk8AS7awxM5ZV5sQ" alt="Lesson 6-1.png" />
Though this is a common strategy among retirees, at this age you would need to carefully consider whether the higher cost of permanent life policy seems like a solid strategy.
<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Cost of Long Term Care by State: Cost of Care Report.&rdquo; Genworth, www.genworth.com/aging-and-you/finances/cost-of-care.html. Accessed 23 December 2022.</li>
<li style="font-weight: 400;" aria-level="1">Schwab-Pomerantz, Carrie. &ldquo;Should You Purchase Long-Term Care Insurance?&rdquo; Schwab, 12 March 2021. https://www.schwab.com/resource-center/insights/content/should-you-purchase-long-term-care-insurance. Accessed 20 August 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;2022 Long-Term Care Insurance Information.&rdquo; American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2022.php. Accessed 23 December 2022.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Ilbd.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Top 7 Guaranteed Universal Life Insurance Companies.&rdquo; Top Whole Life, 21 July 2022. https://topwholelife.com/top-7-guaranteed-universal-life-insurance-companies. Accessed 23 December 2022.</li>
</ol>

The best way to manage your investments depends largely on the investments you have and your specific plans for retirement. However, it's important to note that being 65 and older gives you some advantages when it comes to retirement. The most notable of which is the fact you are old enough to take withdrawals from tax-advantaged retirement accounts like a 401(k) or an IRA.&nbsp;
However, you may want to use other assets to cover living expenses while you let your money grow, whether that includes any inheritance you have received or cash you have in a savings account. First, let&rsquo;s take a look at the average savings by age for your age group.
<h2>Average Savings by Age 65 - 70&nbsp;</h2>
Most experts agree you can retire when you have the assets to pay for 25 years of living expenses. As an example, a 65-year-old would strive to build up assets to cover their living expenses until age 90.&nbsp;
So in Bob and Ellen&rsquo;s case from the example in Lesson &ldquo;How Long Your Savings Will Last by Budget,&rdquo; if they plan to spend $75,000 per year in retirement (roughly $6,000 per month) they would be able to retire with just under $500,000 in the bank. While other retirement income streams you have can reduce the amount of money you need, longevity above and beyond that 25 years can have the opposite effect. If your family is full of octogenarians and above, Silvur can take this into account when we calculate your Retirement Score. This will give you a better sense of how long your money will last.&nbsp;
Once again, however, it's important to note that lowering your living expenses can help you increase your Retirement Score. If you manage to pay off your mortgage or eliminate all your debts before retirement, that can make a huge difference.
<h2>401(k)</h2>
By now, you can tap into your 401k without any concern about penalties or fees, unlike your younger peers. But one thing you will still have to pay is taxes. Since you didn&rsquo;t pay taxes on the money you put into your 401k account, the tax man will be lurking when you pull money out. That&rsquo;s why it&rsquo;s a good idea to have a withdrawal strategy for your retirement accounts; decide which type you&rsquo;ll pull from first; tax-deferred or tax free, and stick with it.&nbsp;
On the flip side, perhaps you&rsquo;re feeling like you need to put in a few more years of work. If that&rsquo;s the case because it appears your savings fall short of where they need to be, maximizing contributions to your 401k should be a top priority for you. In 2023, the contribution limit is $22,500. But you&rsquo;re eligible to contribute an additional $7,500 each year. While it may not seem like a lot, it&rsquo;s a great way to boost your savings before you leave the workforce. 
<h2>IRA</h2>
By the time you reach 65 or above, you can also withdraw funds from your IRA account without penalty. If you have a Traditional IRA, you&rsquo;ll be taxed on any money you withdraw, while a Roth IRA allows you to withdraw money tax free.&nbsp;
By this point in life, you can contribute a maximum of $7,500 to your IRA. And, thanks to the SECURE Act of 2019, you can continue contributing to your IRA past the age of 72, but there&rsquo;s one caveat: you can only contribute from earned income&mdash;not pensions, dividends, or any other source. And you should know that you can contribute to both your own and your retired spouse&rsquo;s IRA as long as the total contributions don&rsquo;t exceed your income.1
<h2>Roth Conversions</h2>
As you enter this age bracket, 65 to 70, RMDs may be on your mind more and more if you&rsquo;ve built a handsome nest egg. That&rsquo;s because in just a few short years, at age 73, you&rsquo;ll be required to start withdrawing a certain amount of money from your retirement accounts. Required minimum distributions can be costly, since the money you withdraw will be counted as income for tax purposes. Converting money from a tax-deferred account like a Traditional Roth or a 401k to a Roth IRA can help you avoid RMDs, but you&rsquo;ll pay a hefty tax bill in the year you convert. Think of it this way: you don&rsquo;t pay taxes on the money you put into your 401k or traditional Roth, so you&rsquo;ll have to pay this tax bill when you convert the money from these accounts.&nbsp;
Doing several smaller conversions can help you avoid paying too much tax in one year. To learn more about how to account for taxes and RMDs in retirement, read our course &ldquo;<a href="https://www.silvur.com/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>.&rdquo;
<h2>Pensions</h2>
Pensions are typically offered in the form of monthly payments that last for the rest of your life. Most pension plans allow you to take a pension as a one-time lump sum payment or a monthly amount. Monthly payments can make budgeting in retirement easier, and you could end up "ahead" depending on how long you live, but a lump sum of money can give you more control over how your pension funds are invested and spent.
Here are some pros and cons of each withdrawal method:2
<h3>Lump Sum</h3>
<img src="https://cdn.buttercms.com/6EdraqaMTExkfGcNFkSG" alt="Lesson 7.png" />
<h3>Monthly Payment</h3>
<img src="https://cdn.buttercms.com/jNccTeTxSzgAc7vyQHsQ" alt="Lesson 7-1.png" />

<h4>Sources:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Benz, Christine. &ldquo;You Can Now Make IRA Contributions at Any Age. But Should You?&rdquo; Morningstar, 13 February 2020, https://www.morningstar.com/articles/966490/you-can-now-make-ira-contributions-at-any-age-but-should-you. Accessed 30 July 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Pension Questions: Should I Take a Lump Sum?&rdquo; StateFarm, https://www.statefarm.com/simple-insights/retirement/pension-questions-should-i-take-a-lump-sum-offer. Accessed 30 July 2021.</li>
</ol>

If you&rsquo;re between 65 and 70, you&rsquo;ve reached an important milestone when it comes to Social Security benefits: you&rsquo;ve either reached full retirement age, or you will very soon. If you&rsquo;ve put off claiming your benefits this long, congrats! Drawing Social Security at full retirement age nets you the maximum benefit amount you&rsquo;re entitled to. And while that looks different for everyone, it&rsquo;s nice to know you&rsquo;re no longer leaving money on the table when it comes to your Social Security benefits.&nbsp;
By age 70, your Social Security benefits are projected to be 77% higher than someone who claimed their benefits as early as possible at age 62. So that&rsquo;s something to celebrate. But it&rsquo;s best to use Silvur&rsquo;s Social Security calculator to determine when the best time to elect is based on your longevity input.
<img src="https://cdn.buttercms.com/uj5uut5RT4KDo7mSWxnL" alt="Lesson 8.png" />
If you&rsquo;re divorced or widowed, perhaps you&rsquo;ve already been receiving ex-spouse or survivor benefits. As a divorcee, you&rsquo;re entitled to 50% of your ex-spouse&rsquo;s benefits if that amount is higher than your own benefits. And if you&rsquo;re eligible for survivor benefits, you can claim 100% of your loved one&rsquo;s benefits if the amount is higher than your own.&nbsp;
In both cases, this allows you to leave your own Social Security benefits alone to let them grow as much as possible before you elect. Remember, you&rsquo;ll receive 100% of your eligible benefits if you wait until full retirement age to elect, but your benefits will be permanently reduced if you file earlier than that.&nbsp;
However, if you&rsquo;re a widow(er), there&rsquo;s an additional election strategy that you can do if you qualify for your own benefits. Find all your election strategies in our class &ldquo;<a href="https://www.silvur.com/retirement-school/social-security-benefits-for-widows">Social Security Benefits for Widow(er)s</a>.&rdquo; And for divorcees, head to our class &ldquo;<a href="https://www.silvur.com/retirement-school/divorced-social-security-benefits">Social Security Benefits for Divorced Couples</a>&rdquo; to see what rules you need to follow to get your ex-spouse's benefits.

Planning for taxes in retirement can be tricky since you don't know how tax laws could change before you're able to step away from work. Also, note that tax laws and rules could change dramatically during the decades you spend enjoying retirement.&nbsp;
Any retirement budget should include taxes, since you&rsquo;ll still be on the hook to pay some taxes even after you exit the workforce. Here&rsquo;s what you need to know about taxes in retirement.&nbsp;
<h2>Taxes on Social Security Benefits</h2>
When putting together your retirement strategy that involves leaving the workforce between the ages of 65 and 70, don&rsquo;t forget to account for taxes on your Social Security benefits. The federal tax rate on Social Security benefits is based on your combined income. You can determine your combined income by adding the following: Your adjusted gross income + nontaxable interest + &frac12; of your Social Security Benefits.
If your combined income is:
<ul>
<li style="font-weight: 400;" aria-level="1">$34,000 or more ($44,000 or more if you&rsquo;re married filing jointly), up to 85% of your benefits will be subject to federal tax.</li>
<li style="font-weight: 400;" aria-level="1">Between $25,000 to $34,000 (or between $32,000 and $44,000 as a joint filer), you&rsquo;ll be taxed on 50% of your benefits.&nbsp;</li>
</ul>
And if you live or are planning on moving to any one of these 13 states -&nbsp; Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia - note that these states also tax your Social Security income. For state-specific information, visit our State Taxes on Social Security lesson.&nbsp;
<h2>Taxes Based on Location</h2>
Thinking of relocating during or before retirement? Be sure to factor taxes into your decision. After all, your new location may have a big factor on your taxes. Consider differences in cost of living and healthcare expenses, as well as federal and state taxes. Here&rsquo;s a shocking example: the median annual health care rate in New York is about $8,282 whereas Hawaii is $5,408. So where you live truly does matter when it comes to having extra money in your pocket.1
And if you plan to leave an estate, that money could also be taxed federally and at the state level if you&rsquo;re residing in a state that allows this. And that&rsquo;s the same if you receive an inheritance as well. State inheritance tax rates vary widely, from 1% to 16%, and in most states, the difference is determined by your relationship to the deceased.2&nbsp;
<h3>Example</h3>
Bob and Ellen, who we&rsquo;ve introduced previously, are planning to relocate in retirement. They currently live in Texas but now want to move to New York City to be closer to their grandchildren. Their current Retirement Score in Texas is 105y 6m but if they were to move to NYC, it would be 89y 5m. By moving, their Retirement Score will go down by 16 years.&nbsp;
<img src="https://cdn.buttercms.com/vrYG2DOBTiGpgpxijKnf" alt="Lesson 9.png">
To learn more, check out our class, &ldquo;<a href="https://www.silvur.com/retirement-school/how-location-impacts-taxes" rel="follow noopener" target="_blank">How Location Impacts Taxes</a>.&rdquo;&nbsp;There, you can dive deeper into each state&rsquo;s individual tax situation as well as any special tax deductions for older Americans. Then, go to our Cost of Living calculator to compare different tax rates and see how moving impacts your Retirement Score.
<h2>Taxes on Investment Accounts</h2>
Once you&rsquo;re finally retired, you&rsquo;ll likely turn to those tax-deferred retirement accounts you&rsquo;ve been working so hard to beef up over the years. Once you do, remember that you&rsquo;ll be taxed on any withdrawals you make. The amount will count as ordinary income in the year it&rsquo;s withdrawn, though at this age, there are no other penalties to worry about.&nbsp;
These tax-deferred accounts, like a traditional 401(k) or 403(b), SEP, or traditional IRA, are subject to Required Minimum Distributions (RMDs), which are yearly amounts you&rsquo;re forced to take once you turn 73 (or 72 if you were born before December 31, 1950). RMDs are also treated as taxable income.
If your money is sitting in a Roth account, it can continue to grow untouched, and thanks to the SECURE Act, you can even continue contributing to it. But don&rsquo;t forget to assign a beneficiary to your Roth IRA, your beneficiary can inherit 10 years of tax-free distributions.
<h2>Tax Strategies to Help You Save Money</h2>
Yes, taxes are definitely part of retirement. And one thing you may not have considered is the order in which you&rsquo;ll start drawing down your retirement accounts. But chances are you&rsquo;ve got money in both taxable and non-taxable accounts, so you can actually minimize the impact to your taxes by putting together a savvy withdrawal strategy.&nbsp;
How do you know which withdrawal strategy to employ? It depends mostly on the goals you have and your desire to shield yourself from a tax hit as a result of upcoming Required Minimum Distributions (RMDs). Below, we&rsquo;ve taken an excerpt from our Taxes in Retirement course as a reference. Here, you&rsquo;ll be introduced to three popular methods of withdrawal sequencing, depending on what your goals are.
Taxable First, then Tax-Deferred
<ul>
<li style="font-weight: 400;" aria-level="1">Withdraw from taxable accounts first (Social Security, annuities, other forms of earned income)</li>
<li style="font-weight: 400;" aria-level="1">Then start to draw down tax-deferred accounts (401(k)s, traditional IRAs, etc.)</li>
<li style="font-weight: 400;" aria-level="1">Leave the tax-exempt accounts (Roth IRA or Roth 401(k)) for last</li>
</ul>
Doing this allows you to potentially benefit from a lower tax rate and prioritizes leaving an inheritance for your heirs. Here, accounts with RMDs are tapped early on.
Taxable First, then Tax-Exempt:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Drawdown taxable accounts first, like the first method,&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Then draw down the tax-exempt accounts (your Roth accounts),&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Finally, start drawing on the tax-deferred accounts (401(k)s, etc.).&nbsp;</li>
</ul>
This method reduces your tax bill throughout retirement and can make sense if you anticipate a lower tax rate in the future when you start drawing from the tax-deferred accounts, since those withdrawals will be counted as income.&nbsp;
Tax Bracket Management:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Start with your tax-deferred accounts (e.g., IRA &amp; 401K accounts) first, but only up to a specific tax bracket (e.g. 12%, 22%, etc),</li>
<li style="font-weight: 400;" aria-level="1">Then withdraw from taxable accounts,</li>
<li style="font-weight: 400;" aria-level="1">Leave tax-exempt funds for last.&nbsp;</li>
</ul>
This method prioritizes passing your estate to your heirs and may be a good strategy if you expect a higher tax rate in the future. However, staying within a preferred tax bracket requires a bit of tax knowledge.
<h2>Taxes on Inherited Accounts</h2>
You may have inherited accounts from your parents or relatives - it&rsquo;s a great way to add to your nest egg. But there are some tax considerations that come along with it. Typically, any inherited accounts are still subject to RMDs and must be distributed within a 10-year period. These inherited accounts, outside of Roths, count as taxable income and can bump you into a new tax bracket. And depending on where you live, you may incur state taxes, too. If you don&rsquo;t want to deal with the taxes and responsibilities of real property or creditors, you have an option to disclaim an inheritance. To understand all the tax liabilities and rules that come with an inheritance, go to our course &ldquo;<a href="https://www.silvur.com/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>&rdquo; to get a deeper understanding.
Here are some tax considerations you'll want to keep in mind as you transition to retirement:
<ul>
<li style="font-weight: 400;" aria-level="1">Make sure to plan for Required Minimum Distributions (RMDs) once you reach age 73.</li>
<li style="font-weight: 400;" aria-level="1">Consider lowering your expenses so you can minimize withdrawals from retirement accounts, and thus keeping your tax bill manageable.</li>
<li style="font-weight: 400;" aria-level="1">Lean on any tax-free money you have for retirement as you plan to minimize taxes owed, such as investments in a Roth IRA or your personal savings.</li>
<li style="font-weight: 400;" aria-level="1">Remember that, once you reach age 65 or older, you can use funds from a Health Savings Account (HSA) any way you want, provided you pay income taxes on your withdrawals.</li>
<li style="font-weight: 400;" aria-level="1">Consider speaking with a tax professional who can help you find ways to legally lower your tax bill during retirement.</li>
<li style="font-weight: 400;" aria-level="1">Next steps: Go to our Retirement School course called &ldquo;<a href="https://www.silvur.com/retirement-school/taxes-in-retirement-101" rel="follow noopener" target="_blank">Taxes in Retirement 101</a>&rdquo; to learn more.</li>
</ul>
<h4>SOURCES:</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Silvur. Silvur Services LLC, version 4.8.5. Apple App Store, https://apps.apple.com/us/app/silvur-retirement-goals/id1494044213.</li>
<li style="font-weight: 400;" aria-level="1">Cammenga, Janelle. &ldquo;Does Your State Have an Estate or Inheritance Tax?&rdquo; Tax Foundation, 24 February 2021. https://taxfoundation.org/state-estate-tax-state-inheritance-tax-2021. Accessed 17 May 2021.</li>
</ol>

Knowing whether you're ready to retire can be tricky since so many details come into play. To show how one family reached their retirement decision, we interviewed a couple who happily retired at age 65 without significant assets.
<h2>Retirement at 65-70: A Real-Life Story</h2>
Sandra and Damon P. were both able to retire at the age of 65, although they were 6 years apart in age. The pair reached their retirement goals easily due to the fact they lived below their means and have remained in the same modest home for almost 50 years.
Damon worked in the insurance industry for 30 years before choosing to retire, and Sandra continued working as a school librarian until age 65. The fact that Sandra continued working for the first six years of Damon's retirement helped the duo leave their retirement funds alone longer. And since Sandra was younger and enjoyed her job, she didn't mind.
Once Sandra turned 65, she decided she was tired of working and ready to enjoy her golden years. She decided to take Social Security benefits early to help increase the couple's monthly income.&nbsp;
The couple has been happily retired for the last decade thanks to approximately $700,000 in savings, Social Security payments, and the fact they have been mortgage-free for the last 30 years. Currently, they are living off of their Social Security benefits and leaving their nest egg to grow.

The specific steps you'll need to take to retire depend on your unique situation and how old you are right now. The following checklist can help you figure out which moves you should make next:
<h3>Steps at Age 55:</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Take an inventory of your assets, then run your Retirement Score using your current financial picture to see if you&rsquo;re on track to retire at your desired age.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Create a last will and testament</li>
<li style="font-weight: 400;" aria-level="1">Create a formal living will</li>
<li style="font-weight: 400;" aria-level="1">Name or update beneficiaries on all your accounts</li>
<li style="font-weight: 400;" aria-level="1">Look for ways to reduce your living expenses</li>
<li style="font-weight: 400;" aria-level="1">Find ways to increase income</li>
<li style="font-weight: 400;" aria-level="1">Use Silvur's Cost of Living calculator to see if other areas are more or less expensive than your current zip code, and consider moving to lower expenses. Secure a loan before retiring.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Assess your current life insurance policies and consider updating them or purchasing new coverage</li>
<li style="font-weight: 400;" aria-level="1">Look into long-term care insurance</li>
</ul>
<h3>Once You're Age 60:</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Run your Retirement Score with your current financial profile to see if you&rsquo;re still on track to retire.</li>
<li style="font-weight: 400;" aria-level="1">Start building a retirement budget and drawdown strategy</li>
<li style="font-weight: 400;" aria-level="1">Take full inventory of any future benefits you'll receive, such as pension funds</li>
<li style="font-weight: 400;" aria-level="1">Use the Silvur app to decide if you should take Social Security benefits early, or if you should wait</li>
<li style="font-weight: 400;" aria-level="1">Review your insurance coverage if you have it, to help you budget for long-term care expenses and final expenses that may be needed in the future.</li>
<li style="font-weight: 400;" aria-level="1">Continue cutting expenses</li>
<li style="font-weight: 400;" aria-level="1">Look for ways to pay off any remaining debts you have, such as a mortgage or car loan</li>
</ul>
<h3>At Age 64:&nbsp;</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Check your Retirement Score to know if you&rsquo;re able to meet your retirement plan date</li>
<li style="font-weight: 400;" aria-level="1">Sign up for Medicare within three months of the month you turn age 65 and within three months after the month you turn 65</li>
<li style="font-weight: 400;" aria-level="1">Use Silvur's Healthcare Calculator to get Medicare Part A and B and supplement plan costs estimates based on your zip code</li>
<li style="font-weight: 400;" aria-level="1">Update insurance policies and beneficiaries on all your accounts</li>
<li style="font-weight: 400;" aria-level="1">Use the Silvur app to project your Retirement Score, which projects the age you'll be when you run out of retirement money (if at all)</li>
</ul>

Planning for retirement can be overwhelming, and that's especially true if you're starting the process later in life. We hope the information and resources we have shared in this guide will help you in your journey &mdash; or at least give you something to think about.
No matter what, you'll have the best chance at retiring by age 65 or 70 if you start planning now. You'll also be better off if you're willing to take actionable steps now to increase retirement assets or lower your cost of living.
Silvur provides an array of resources and calculators that can help you see where you're at now &mdash; as well as where you could be in a few years. Make sure to utilize these valuable tools as you begin planning for the retirement you really want.
<h3>Next Steps:&nbsp;</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Check out Silvur&rsquo;s Retirement Score to play out different scenarios to see what you can do to extend your score based on your planned retirement age, Social Security election age, expenses, net worth and healthcare costs</li>
<li style="font-weight: 400;" aria-level="1">Use our Healthcare Calculator to see how much Medicare costs will add to your score</li>
<li style="font-weight: 400;" aria-level="1">Use our Social Security Calculator to see the best age to begin taking Social Security benefits</li>
<li style="font-weight: 400;" aria-level="1">Use our Cost of Living Calculator to see if relocating in retirement could help you retire early or on time</li>
</ul>

Retiring by the age of 65 requires some planning and forethought, but it's entirely possible if you make the right moves. In this course, you’ll find all the steps you can take to retire when you're ready, as well as the apps and tools you can use to ease the transition.

Featured Monthly Classes

No IT department. No lengthy onboarding. In a few weeks, you will go live with your own fully branded Retirement Simplified site and be providing a stronger retirement for your members in record time.

From Zero-to-Branded Site in a Few Weeks

Connect your members to retirement-ready products and services. Whatever your current strategic goals - wealth management, loans, mortgages, insurance, Medicare benefits, and more - you will have a dedicated way to bring your message directly to your members.


Good for Your Members and Your Bottom Line

Our patent-pending SmartDraw technology takes tens of thousands of variables and translates them into an intuitive, personalized Score so your members will know the answer to their number one question: How long will their money last in retirement? This powers our personalization and localization algorithms so your members will see the right Tools and Education at the right time and place.


Technology-Powered Retirement

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The Security of Your Members is Our Top Priority

We follow all SOC 2 protocols and employ the latest security measures so you can rest easy at night knowing that your members information is encrypted under lock and key.

Learn how Retirement Simplified has helped members across the country.

Explore how MSUFCU was able to provide value through personalized education and tools with Silvur.

MSUFCU: Helping Members 50+ in Times of Transition & Uncertainty

Case Study - MSUFCU

Learn how Silvur helped credit union members navigate the highest COLA increase in decades.

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MSUFCU: Helping Members 50+ in Times of Transition & Uncertainty

Social Security's Historic COLA Announcement (Oct. 2022)

Always-On Guidance That Validates Your Members' Retirement Plans

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