4 Things To Do When You Turn 59½

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By Brett Gottlieb and John Mc Kean

If you’re nearing the big 6-0, don’t worry about it. Sixty is the new 40. When I take a walk on the beach, it’s impressive how often I see surfers out there that are well into their 50s and 60s. Instead of letting another birthday get you down, focus on the benefits. Once you’re 55, you can get discounts at McDonald’s and Denny’s and even get free drinks at Chick-fil-A and KFC. (1)

There are also some real financial benefits to reaching age 59½ beyond just free soft drinks and discounted meals. Here are four things to do when you turn 59½ in order to explore the opportunities newly available to you and build a strong foundation for your future retirement.

Reevaluate Your 401(k)

Fifty-nine and a half is the magic age when you can start taking money out of your retirement accounts without penalty. That doesn’t mean it’s time to drain your accounts, but it does give you more options.

Use It As A Safety Net

By now you’ve probably discovered the benefits of having an emergency or rainy-day fund. Having some cash set aside gives you incredible peace of mind because you know that if you lose a job or your car breaks down, you won’t have to go into debt.

Up until now, your only real options for such a fund were a savings or money market account that couldn’t even keep up with inflation. Now that the withdrawal penalty is gone, you can actually use your 401(k) as an easily accessible, tax-deferred safety net. In a retirement account, you can even invest some of the money for growth, though you do want to keep some in cash for emergencies.

Make Catch-Up Contributions

The IRS allows people over age 55 to contribute extra to their retirement accounts, both IRAs and employer-sponsored accounts. Doing so will not only build up your retirement savings, but it can lower your taxable income. A lower income can keep you in a lower tax bracket and make you eligible for more tax deductions, which saves you money on taxes.

Consider An In-Service Rollover

The major complaint regarding 401(k) plans is the lack of investment options available within a given plan. Usually you have 15-20 options, (2) compared to the seemingly infinite options available on the open market. Once you reach age 59½ you may be eligible for an in-service rollover, which allows you to move 401(k) funds into an IRA without penalty even while you still work for the same employer.

This is a very unique opportunity to access better investments that is not available to most workers. Not only do you have more investment options within an IRA, but it also gives you greater flexibility and more control.

Track Your Spending

One of the hard things about planning for retirement when you’re younger is that you almost have no concept of what your income needs and spending habits will be so far into the future. While you may not be planning on retiring for quite some time, it’s still close enough that you have a better grasp on what your needs will be.

Now is the perfect time to start tracking your spending in order to create a retirement budget. Having a detailed budget for retirement will help you determine when to retire as you will be able to see the trade-offs between working longer and the lifestyle you’ll be able to afford in retirement.

Don’t Forget Healthcare

Now is an important time to be thinking about your healthcare. It’s easy to assume that it’s safe to retire now that you have access to all of your retirement savings or even if you wait until you’re 62 and can start receiving Social Security benefits. The mistake that people make when retiring early is forgetting about healthcare.

Even though you can access your money penalty-free now, you don’t have access to Medicare until you are 65. If you’re playing with the idea of retiring before 65, start researching your healthcare options today. Whether you make use of COBRA or buy an individual policy on the exchange, you need to make sure you have coverage until you reach Medicare eligibility.

Consult A Financial Professional

As you near retirement age, there is a lot for you to think about. In the coming years, you are going to be making a lot of major decisions that will affect you for the rest of your life. In times like these, it’s best to consult with an experienced financial professional.

At Comprehensive Advisor, we have worked with many people in your stage of life. We help them evaluate their goals, analyze their options, and come to decisions that they will be happy to live with for a lifetime. Our financial software can map out all kinds of different scenarios so that you can enter into retirement with a solid Plan A, Plan B, and even more. If you could use an expert guide through this season of life, email us at info@ComprehensiveAdvisor.com, call (760) 813-2125, or even come meet us in person at one of our events.

About Brett and John

Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees in Business Administration and Economics. Brett is Life Insurance licensed in several states.

John Mc Kean, financial advisor, joined Comprehensive Advisor in 2016. He has been in the financial services and retirement planning industry for over six years. John is Life Insurance licensed in California.

Brett and John previously worked as Registered Representatives with Securities America, one of the largest independent broker/dealers in the country, and currently offer advisory services through Legacy Road, LLC, and/or AE Wealth Management, LLC. Both are passionate about educating clients on retirement planning. They take a common-sense approach to the planning process and work with clients to create a retirement road map to help ensure their assets are protected and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County. Learn more by connecting with Brett on LinkedIn or email them at info@ComprehensiveAdvisor.com.

Advisory services offered only by duly registered individuals through Legacy Road LLC and/or AE Wealth Management, LLC (AEWM). Comprehensive Advisor, Legacy Road LLC and AEWM are not affiliated companies. California Insurance Licenses #0C68886 & #0K37445. Neither the firm nor its representatives may give tax or legal advice. Investing involves risk, including the potential loss of principal.

This material is intended to provide general information and is believed to be reliable, but accuracy and completeness cannot be guaranteed. 175821

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(1) https://www.seniorcitizendiscountlist.org/california-ca-senior-citizen-discount-list-restaurant-retail-grocery-travel/

(2) https://www.investmentnews.com/article/20180216/FREE/180219918/whats-the-right-number-of-funds-in-a-401-k-plan

We are an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives.

Investment Advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). Comprehensive Advisor and AEWM are not affiliated companies.

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