Saving & Spending Budgeting & Expenses

11 Money Rules That Change Completely Once You Turn 60

How your approach to saving and spending needs to evolve as you enter your 60s.

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Updated July 9, 2025
Fact checked

Turning 60 is a significant financial shift. As retirement comes much closer, your priorities should shift. For example, your concern is managing risk and preserving what you have instead of growing your money. Some financial rules remain the same, but others may need to evolve as you enter this new chapter.

It's time to rethink how you get ahead financially.

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You need less risk, not more reward

LIGHTFIELD STUDIOS/Adobe elderly couple counting money

Once you're in your 60s, preserving what you've built should take priority over chasing higher and higher rewards. A market dip could take longer to recover from, and that isn't necessarily the time you have.

It's time to rebalance your portfolio towards lower-volatility assets or income-generating funds that can provide stability without fully stepping away from growth.

Estate planning becomes non-negotiable

gunnar3000/Adobe real estate plan documents folder

At this stage, estate planning is essential, not just a good idea. A basic will isn't enough in some cases. You might need a living trust, power of attorney, and a health care directive to cover all possible scenarios.

Keeping your beneficiary designations up to date ensures your assets go where you intend and helps your family avoid delays and confusion during a difficult time.

Your health is now a major line item

Kamitana/Adobe health insurance application form

Health care costs are likely to rise. A 65-year-old retiree can expect to spend about $165,000 on health care during their retirement, and that's just the average. You could end up needing a lot more. Medicare often doesn't cover everything, so supplemental insurance and long-term care planning are usually worth looking at.

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The 4% rule might be too generous

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The classic 4% withdrawal rule was built for a different era with shorter retirements and more predictable markets. Today, people are living longer, and health care costs are rising.

Drawing 4% annually could back you into a corner and run the risk of you outliving your savings. It's smart to run the numbers with a financial planner and not just assume that 4% is a reasonable withdrawal rate.

It's time to start spending (strategically)

LIGHTFIELD STUDIOS/Adobe focused senior couple taking notes

After decades of saving money, it can be hard to go into spending mode. However, retirement is not the time to start hoarding all your cash. That said, strategic spending matters.

Prioritize meaningful experiences and health-care-related expenses while being mindful of your long-term plan. A sustainable drawdown strategy helps you enjoy retirement now without compromising your future security.

Taxes hit differently in retirement

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Your tax picture changes once you start drawing from Social Security, IRAs, or other retirement accounts. Required minimum distributions (RMDs) and taxable Social Security benefits could push you into a higher bracket than expected. Plan ahead with Roth conversions or careful withdrawal sequencing to help manage your tax burden.

Downsizing is about cash flow

Benjamas/Adobe tax return preparation and financial management

A smaller home could mean more than a simpler lifestyle. It frees up equity and lowers your maintenance costs (and potentially your property taxes). If your current home no longer fits your needs or budget, consider downsizing to give yourself some extra financial breathing room and help stretch your savings further.

Part-time work can be part of the plan

Brian Jackson/Adobe Application for employment

Retirement doesn't have to mean zero income. Many part-time jobs could help supplement your income and keep your savings intact.

Whether you're working a few hours a week at a part-time job or consulting, you don't necessarily have to quit working just because you're officially "retired."

Social Security timing can make a big difference

JohnKwan/Adobe social security and retirement income cards

Claiming benefits at 62 might seem tempting, but it does cause a permanent reduction in your monthly benefit. You're spreading the same amount of money over more years, basically.

Waiting until full retirement age (or even 70) could increase your monthly income. Of course, the right time to retire and draw Social Security depends on many factors, like your health and overall financial picture.

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Insurance needs likely change

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You may no longer need the same life insurance coverage you did in your 40s or 50s. Instead, the focus may shift to long-term care insurance or policies that protect your assets. Now is the time to review your coverage and look at other options.

Budgeting matters more than ever

LIGHTFIELD STUDIOS/Adobe senior couple sitting at home as counting money

Every dollar counts when you have a fixed (or semi-fixed) income. Even if you've been pretty good at budgeting, now is the time to get into the nitty-gritty of tracking spending and adjusting for inflation. A clear, realistic budget ensures that your savings last throughout retirement without you needing to cut back constantly.

Bottom line

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Turning 60 changes the financial landscape a lot. Strategies you once relied on for growth now must shift towards protecting assets and managing health costs.

Now is the time to revisit your plan and make intentional choices that support a secure future. One often overlooked strategy to maximize your retirement savings is to delay RMDs by rolling assets into a Roth IRA, which could reduce your tax burden and keep your investments growing longer.

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