Ever heard the phrase 60 is the new 40? While that maybe an exaggeration, it’s meant to highlight the very real phenomenon of our ever increasing health and longer lifespans.
For the average person who turned 60 in 1970, they could expect to retire at age 64 and live to age 70.8. For someone who turned 60 in 2010, they can very easily work throughout their entire 60’s and expect to live to at least 78.7 years old. With the advances in modern medicine, lower rates of smoking and generally healthier lifestyles, our active and productive years can expand well into our 70’s and beyond.
How we choose to use this “extra” time will be determined by our current situation and our priorities for the future.
For some, their 60’s are a time to kick back and relax. They have worked for 30+ years, lived below their means and diligently saved money for retirement. They may also have sold a successful business, or been able to retire from a (increasing scarce) job that had a good pension.
For others, the prospect of retirement isn’t even a thought. Whether it’s a case of financial reality or just the psychological need to be productive, a continuing presence in the workforce is a reality for more and more of the 60+ crowd.
So how to change your life at 60 years old and feel proud of yourself?
Changing Priorities in Your 60’s
For most us us, our priorities change as we get older. Living for parties and excitement, what use to be called “working for the weekend” slowly gives way to working on the weekend and eventually working towards retirement.
By the time we hit our 60’s, a lot of us are looking to slow down. Health issues, either our own, our spouses or parents often come into play at this time in our life. This combined with having (hopefully) grown children, a paid or nearly paid off home and bit of savings in the bank. This means that you can start to trade long hours and stressful work situations for a more flexible schedule and more leisure time.
The key to making a successful life change in your 60’s is being prepared for both the mental and financial challenges you are likely to face.
Understanding the Psychological Challenges
Any major life change comes with its own set of psychological challenges. When that change takes place in our 60’s. there are some very specific psychological issues to be aware of.
Some of these issues are apparent and we easily recognize them. For instance, we’ve all heard someone say “When I retire, I don’t know what I’ll do with all that time on my hands”. While other challenges are more subtle and harder to quantify such as depression and anxiety.
While not everyone suffers with all or even most of them, here are come common psychological issues to be aware of:
Even positive life changes can cause our anxiety levels to increase. Humans are creatures of habit. We develop routines that make our lives predictable and we rely on that predictability to give us comfort.
Now imagine that after 30+ years of having a relatively stable and routine job, you suddenly retire, get sick, or find yourself out of a job. The routine that you have relied upon to give you a sense of normalcy is suddenly gone.
In humans, the natural response to any major life changing event is an increase in anxiety. Symptoms and severity will vary from person to person, but you should always expect your anxiety levels to increase with any major life change in your 60’s.
What can you do about it?
Establish a new routine to replace the old one, this is the reason we have hobbies!
Gardening, golf, tennis, volunteer work all can help to get you back into a comfortable routine.
Helpful hint: Pick a hobby that has both a physical and social component to it. Both physical and social activity will help to lower anxiety levels.
Even the most happy-go-lucky of us become susceptible to depression during a major life event. In fact, when retiring, changing careers or even striking out on a new business adventure, both anxiety and depression can go hand in hand.
You may find yourself with a lot of excess “nervous” energy that you would have used at your job to meet deadlines and get things done. On the other hand, you may find that you have no energy and all and it’s tough to even get out of bed.
While everyone experiences everyday or “normal” bouts of anxiety and depression, it becomes a problem when these episodes become severe, or last longer that a few days.
At that point, it turns into a serious life threatening situation. It’s recommended that a person seeks medical help if they experience any of the following symptoms:
- Feelings of extreme sadness, emptiness or hopelessness that seem to envelop you.
- Angry outbursts, irritability or frustration, especially over small or normally insignificant matters.
- Loss of interest or pleasure in activities that use to give pleasure, such as sex, hobbies or sports.
- Sleep disturbances, including insomnia or hypersomnia (sleeping too much).
- General tiredness or malaise, so that even small tasks seem to take a lot of effort.
- Unusual changes in appetite, rapid weight loss or gain.
- Slowed or delayed patterns of thinking, speaking or body movements.
- Constant feelings of worthlessness or guilt, fixating on past failures or self-blame
- Trouble thinking, concentrating, making decisions and remembering things (more than normal).
- Frequent or recurrent thoughts of death, suicide or suicide attempts.
- Unexplained physical problems, such as back pain, headaches or stomach ailments.
Dealing with the Financial Challenges
There are very unique financial considerations to take into account when making a major life change in your 60’s.
Depending on your situation, you may find yourself having to come to terms with a completely new relationship with money. Whether retiring, changing careers or starting your own business, chances are your income is going to take a hit.
Part of making a successful life change at 60 is anticipating and planning for these events so you don’t get blindsided. The following is a list of general recommendations that everyone in their 60’s should consider.
1. Get aggressive about paying off debt
Especially credit card debt, it’s almost always at a high interest rate and, without any tax advantages, it just makes all of your purchases more expensive.
So if you are still carrying balances on your credit cards every month, it’s time to get those paid off.
Start with the credit card that has the highest interest rate, and then work your way to the card with the lowest rate.
These tips on How to Nix Your Credit Card Debt in Less Than 3 Years can help you too.
2. Pay off the house
If your home isn’t paid off already, after paying off credit card debt, this should be the next goal. It’s much less stressful going into a situation where you’ll have less income if your house is paid off.
You’ll not only reduce your expenses by not having a mortgage payment, but you’ll also have the piece of mind that comes with knowing that your home isn’t going anywhere.
3. Make a budget
No matter what kind of change you make in your 60’s — career change, retirement or becoming a entrepreneur, both your income and expenses are going to change.
Things like the cost of commuting, wardrobe expenses, credit card and mortgage payments are likely to be reduced. You’ll still need to budget for things like home repair and maintenance (how’s the AC unit or the roof?). Car maintenance and even replacement.
And don’t forget about leisure and entertainment expenses, after all, we all need to enjoy life. As a general rule, 30% of your budget should be allocated to leisure and entertainment expenses.
4. Examine and re-adjust your investment portfolio
This is where a good financial planner comes in. While your earlier investment goals were designed to maximize the amount of money in your retirement account. At this point in your journey, the goals have changed to providing you an income for the rest of your life.
You also want to protect the principal from unnecessary risks so it lasts as long as you do. A good financial adviser can help you make the change from a growth orientated investment strategy into more dividend or income producing assets for your golden years.
5. Consider a change of address
Depending on where you live, moving to a new state might make financial sense. High tax states not only can zap your resources faster than states with lower taxes, but can often times make you get much more “bang for your buck” by moving.
Things like housing, personal property, sales and gas taxes can all add up to a significant savings in a low tax state. Places like Texas, Arizona, Nevada and Florida all have an influx of people migrating from the higher tax states on each coast.
6. Reexamine your insurance needs
A good experienced insurance broker is your best asset when tackling this task.
Do you still need that disability policy to cover your mortgage in case you get hurt? Or could you take that money and buy an annuity that would give you some extra income? What about the cash value of your life insurance?
Walt Disney used the cash value of his life insurance to start Disneyland. Even your car insurance needs to be reevaluated. You can often times save money through good driving and senior discounts as well as eliminating your commuter miles.
Talk to your insurance broker to maximize the benefits and minimize the costs of insurance.
7. Consider becoming an entrepreneur
Roughly 1/3 of people in their 60’s decide to strike out on their own and be their own boss. And why not?
Children are (usually) out of the house, household and credit card debt is likely to be low, most people have some savings by this point in their life and often times they are at the pinnacle of their career.
With the prospect of any further career advancement unlikely, many see this as the perfect time to start their own business.
Now ideally, if you’re going to start a business, you should start 2-3 years before you plan on retiring. This will give you a chance to become established, build your network and income stream all while maintaining the benefits of your current job.
But even if you didn’t start early, you can still become a successful entrepreneur, in fact, studies show that older entrepreneurs are generally more successful than their younger counterparts.
So don’t think that your too old to start something, many successful entrepreneurs started businesses later in life. People like Ray Kroc (McDonald’s), Harland “Colonel” Sanders (Kentucky Fried Chicken), Walt Disney, Charles Flint (IBM) and many more. The only person telling you that you can’t do it is you.
It’s never too late to start your business! Here’s the proof.
8. Consider becoming a consultant
If you don’t feel the bite of the entrepreneur bug, but still want to stay connected and earn money. How about becoming a consultant?
After 30+ years working in an industry, you’ve built up a world of knowledge, contacts and experience. All of which is useful and has value.
Doing consulting work allows you to have control over your schedule and, once you are established, it can provide a significant source of income.
9. Get a part-time job for more than just the money
Both entrepreneurship and consulting can take a lot of time and effort, but picking the right part time job can cut your expenses and give you a little spending money.
What are your hobbies? Do you like to golf? Become a marshal on your local golf course. Most courses will pay you a modest hourly rate and let you golf for free.
How about gardening? A part time job at your local nursery will not only provide you with pocket money, but also a discount on plants.
Whatever your hobbies or interests, there’s a part time job out there for you.
Whether you are changing careers, starting a business or retiring, big life changes are by their very nature stressful.
The great thing about being older is that we have the advantage of experience. We’ve been though other life changing events and can anticipate some of the issues we’ll face.
Becoming well informed, getting prepared and making a plan will insure that you can change your life at 60 years old and feel proud of yourself.