Retiring at 60? Your Complete Checklist for a Confident Retirement

Are you approaching 60 and wondering what comes next? You've spent approximately 40 years building your career and accumulating retirement savings...

Are you approaching 60 and wondering what comes next? You've spent approximately 40 years building your career and accumulating retirement savings—now it's time to figure out how to use those assets wisely. This comprehensive guide answers the most pressing questions people in their early 60s face when preparing for retirement.

Whether you're planning to retire soon or have already taken the leap, understanding these seven critical areas will help you make informed decisions about your financial future.

1. Where Is Your Money Located?
Understanding Your Account Types
The first crucial question is understanding where your retirement savings are held. This seemingly simple question has significant implications for your withdrawal strategy and tax planning.
Common account types include:

• 401(k) or Traditional IRA (Pre-Tax Accounts): Money contributed before taxes, meaning withdrawals are fully taxable
• Roth IRA or Roth 401(k) (Tax-Free Accounts): Contributions made with after-tax dollars, qualified withdrawals are tax-free
• Brokerage Accounts (Taxable Accounts): Also called bridge accounts or individual accounts, these hold after-tax investments

There's no single "right" answer for where your money should be. Many retirees have all their savings in pre-tax accounts, while others converted everything to Roth regardless of tax implications. Some self-employed individuals primarily have brokerage accounts because they never established business retirement accounts.

The Optimal Withdrawal Order
The sequence in which you withdraw from different account types matters tremendously for tax efficiency and long-term wealth preservation.
The generally recommended withdrawal order is:

1. Taxable/brokerage accounts first
2. Pre-tax accounts (401k, Traditional IRA) second
3. Roth accounts last

Why does this order matter? Starting with taxable accounts typically results in lower lifetime taxes and more money remaining at the end of your retirement plan. This strategy allows your tax-deferred and tax-free accounts to continue growing while you draw from accounts with more favorable tax treatment on gains.
Many people mistakenly think they should drain pre-tax accounts first to reduce future Required Minimum Distributions (RMDs). However, financial planning analysis consistently shows that the taxable-first approach produces better outcomes for most retirees.

2. How Is Your Money Allocated?
The Allocation Problem
One of the most common mistakes people make as they approach retirement is maintaining an inappropriate asset allocation. Many pre-retirees find themselves in one of two extremes:

• 100% in equities (stocks)
• 100% in bonds or cash

Neither extreme properly positions you for retirement success. Your portfolio allocation should align with both your retirement goals and your risk tolerance.

Understanding Risk Tolerance in Retirement
Risk tolerance becomes critically important once you stop contributing to your retirement accounts and start withdrawing. During bull markets, aggressive allocations feel comfortable. But when markets decline and you're simultaneously withdrawing funds, the psychological impact intensifies dramatically.
This "freak out moment" is common among new retirees who suddenly realize they're depleting a falling portfolio rather than contributing to one. If this describes you, you're not alone—this anxiety is nearly universal among retirees experiencing their first significant market downturn.
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The Two-Bucket Strategy
A more sophisticated approach involves what's called the "two-bucket method" for managing retirement portfolios:
Bucket 1: Conservative Assets (5 years of expenses)

• High-quality bonds
• Money market funds
• Stable value investments
• CDs and cash equivalents

Bucket 2: Growth Assets (remainder)

• Diversified stock portfolios
• Growth-oriented investments
• Long-term appreciation focus

The five-year timeframe for conservative assets is based on historical market recovery periods. Following the 2008 financial crisis, it took approximately five years for the market to return from its low point back to previous highs.
How the strategy works:

• During market downturns, withdraw from your conservative bucket
• This allows your growth bucket time to recover without forced selling
• During strong market periods, withdraw from growth assets
• Periodically rebalance to maintain your five-year conservative cushion

This approach helps mitigate sequence of return risk—the danger that poor market returns early in retirement could permanently damage your financial security. The traditional 60/40 portfolio approach, where you withdraw proportionally from stocks and bonds, exposes you fully to this risk.

3. Should You Do Roth Conversions?
The Truth About Roth Conversions
Roth conversions generate intense debate in retirement planning circles. Here's the straightforward answer: it depends on your specific plan.
Roth conversions don't make sense for every single person. The right strategy depends entirely on your individual circumstances, tax situation, and retirement spending patterns.

When Roth Conversions Don't Make Sense
If you plan to spend significant assets early in retirement, then rely primarily on Social Security in later years with minimal remaining savings, conversions likely won't benefit you. Why? Because you'll already be in high tax brackets during your early retirement years when you're spending down assets. Adding conversion income on top only increases your tax burden.

When Roth Conversions Make Sense
Conversions become attractive when you have:

• Large IRA or pre-tax retirement account balances
• Substantial taxable brokerage accounts to live on
• The ability to keep taxable income relatively low during conversion years

This strategy works by living off taxable account assets while systematically converting pre-tax dollars to Roth. Done properly over multiple years, this approach:

• Keeps your current tax liability manageable
• Reduces future Required Minimum Distributions at age 73-75
• Helps avoid IRMAA Medicare penalties (discussed below)
• Creates more tax-free income for later retirement years

The key is consulting with a financial professional or doing thorough analysis before executing conversions. This isn't a decision to make impulsively—the tax implications are permanent.

4. What About Healthcare?
The Healthcare Anxiety
Healthcare represents one of the biggest stressors for early retirees. If you're 65 or older, you're eligible for Medicare and this concern largely resolves itself. But what if you're retiring at 60, 62, or 63?
Many people delay retirement specifically to reach age 65 and Medicare eligibility. However, if you have sufficient assets to cover healthcare costs for a few years, don't let this alone prevent you from retiring. You've worked your entire life and built up savings—use them to live the retirement you've earned, because tomorrow isn't guaranteed.

Healthcare Options Before Age 65
COBRA Coverage
When leaving an employer, you can typically continue your existing health insurance for 18 months through COBRA. Some employers offer variations on this option that you should explore during your exit process.
The downside? COBRA is expensive. You'll pay not only your portion of premiums but also what your employer previously contributed. However, it provides continuity of coverage and may be worth the cost for peace of mind during your transition to retirement.

Affordable Care Act (ACA) Marketplace
The ACA marketplace provides another option, though it can become costly if your retirement income is too high. Premium subsidies phase out at higher income levels, earning it the nickname "unaffordable care" among some affluent retirees.
However, for those who can manage their taxable income strategically, ACA plans can provide reasonable coverage. This is another area where Roth conversions and withdrawal sequencing become relevant—managing your taxable income affects both your ACA premiums and other retirement considerations.

Health Sharing Plans
Some retirees explore health sharing ministry plans or pooled asset arrangements. These alternatives to traditional insurance have both advocates and critics. Research thoroughly and understand the limitations, particularly regarding coverage of pre-existing conditions.
One client with a pre-existing condition discovered their health sharing plan wouldn't cover anything related to that condition for the first three months. Given that their condition could flare up unexpectedly with substantial costs, they decided this coverage gap was unacceptable.

Medicare at 65: Beware of IRMAA
Once you reach 65, Medicare becomes available—but there's an important consideration called IRMAA (Income-Related Monthly Adjustment Amount).

How IRMAA Works
IRMAA functions like tax brackets for Medicare premiums. If your modified adjusted gross income exceeds certain thresholds, you'll pay surcharges on top of standard Medicare Part B and Part D premiums.
These brackets are based on your income from two years prior, meaning your 2025 IRMAA is determined by your 2023 tax return. The surcharges can add hundreds of dollars monthly to your Medicare costs.
While most retirees don't face IRMAA penalties, those who do often have what's called a "first-world problem"—their retirement income is substantial enough to trigger the surcharges. Nevertheless, strategic planning can help minimize these costs.

Avoiding IRMAA Through Planning
This is where Roth conversions and withdrawal strategies circle back into the picture. By doing conversions during lower-income years before Medicare, you can:

• Reduce the size of future RMDs
• Lower your taxable income during Medicare years
• Potentially stay below IRMAA threshold brackets
• Draw from Roth accounts (tax-free) instead of IRAs (taxable) when needed

Comprehensive planning that considers these interconnected pieces can save tens of thousands of dollars over a retirement lifetime.

5. Know Your Expenses
The Realism Problem
Understanding your retirement expenses is absolutely critical, yet many people significantly underestimate what they'll actually spend. This miscalculation represents one of the most common planning failures.
Here's a typical scenario: Someone two years from retirement currently spends $7,000 monthly but projects they'll only need $5,000 in retirement. When asked what will change, they often can't articulate specific reductions.
Ask yourself honestly:

• Will you stop eating at restaurants?
• Is your mortgage being paid off?
• Are you eliminating specific regular expenses?
• What concrete changes will reduce spending by 30%?

Unless you can identify specific, realistic changes, assume your expenses will remain relatively constant or even increase during active retirement years.

Categories to Consider
Essential Expenses:

• Housing (mortgage/rent, property taxes, insurance, maintenance)
• Utilities
• Food and groceries
• Transportation and auto expenses
• Healthcare costs and insurance premiums
• Basic living expenses

Major One-Time Expenses:

• Vehicle replacements
• Roof replacement
• HVAC system replacement
• Major home repairs
• Medical procedures or dental work

These irregular but predictable expenses often catch retirees off guard. If you live in Florida or other warm climates, air conditioning replacement isn't a question of "if" but "when." Plan accordingly.
Wants and Goals (The Negotiable Category)
Discretionary spending includes:

• Vacations and travel
• Home remodeling projects
• Relocation or second homes
• Hobbies and entertainment
• Gifts and charitable giving

These expenses are negotiable. If the market declines and you haven't implemented proper portfolio protection strategies, you might delay that European vacation until the following year. Or if spending runs higher than anticipated, perhaps you take smaller trips closer to home instead of elaborate international travel.

The Budget Reality
​You don't need to track every single dollar obsessively, but you must get in the ballpark. Retirement isn't the time to be caught off guard by unrealistic expense assumptions.
If budgeting hasn't been your strength during your working years, that behavior won't magically change in retirement. You need to establish systems and disciplines before you stop earning a paycheck. Otherwise, you risk depleting your assets faster than planned with no way to course-correct through additional income.

6. Future Income Sources
Social Security Planning
Social Security represents the foundation of retirement income for most Americans. If you're in your 60s, you're approaching eligibility and need to understand your options.
Key decisions include:

• Obtaining your benefit estimate from ssa.gov
• Understanding your full retirement age (66-67 for most current retirees)
• Deciding when to claim benefits

Claiming age options:

• Age 62 (earliest, with reduced benefits)
• Age 65 (Medicare eligible)
• Full retirement age (66-67, depending on birth year)
• Age 70 (maximum benefit with delayed credits)

The "right" age to claim depends entirely on your personal circumstances. Arguments can be made for every age depending on factors like:

• Your health and longevity expectations
• Spousal benefit considerations
• Other income sources and tax situation
• Asset levels and withdrawal strategies
• Whether you're still working

Like Roth conversions, Social Security timing isn't something to guess at. The decision has lifetime implications that warrant careful analysis within your complete financial plan.

Pension Considerations
While traditional pensions have become rarer, many government employees and some private sector workers still have pension benefits. If you're among them, understand these critical factors:
Key pension questions:

1. When does it start? Some pensions begin immediately upon retirement, others have delayed start dates.
2. Is it inflation-adjusted? This is perhaps the most important question.

Many pensions provide fixed payments that never increase. Consider this scenario:

• You retire at 60 with $50,000 annual pension + $30,000 Social Security = $80,000 total income
• Your expenses at retirement: $80,000 annually
• Fast forward 20 years to age 80
• Social Security increased with inflation to $90,000
• Pension remains $50,000 (not inflation-adjusted)
• Your expenses increased to $120,000 annually
• Shortfall: $120,000 expenses - $90,000 income = $30,000 annual deficit

Without inflation adjustments, a pension that seems adequate at retirement can leave you with growing income gaps as the years pass. You need to account for this in your asset drawdown planning.

Inheritance
While some people include expected inheritance in their retirement planning, the general advice is: don't count on it unless you're absolutely certain.
If you have specific knowledge of an inheritance—perhaps you're named executor of an estate with clearly defined assets—then it may be reasonable to include in planning. But if you're simply hoping or assuming, leave it out of your calculations.
Inheritances can be delayed, reduced, or eliminated entirely due to:

• Long-term care costs depleting estates
• Family complications or disputes
• Changed circumstances or relationships
• Simply living longer than expected

Plan for your retirement to work without inheritance. Then if you do receive one, it becomes a bonus that enhances your security rather than a necessity you're depending on.

7. Putting It All Together: The Importance of Comprehensive Planning
The Interconnected Nature of Retirement Decisions
As this guide demonstrates, retirement planning isn't about making isolated decisions. Everything connects:

• Your withdrawal order affects taxes
• Taxes affect IRMAA and healthcare costs
• Healthcare costs impact your expense budget
• Your expense budget determines how much to withdraw
• Withdrawal amounts impact Roth conversion opportunities
• Roth conversions affect future RMDs and taxes
• Social Security timing interacts with all of the above

This complexity explains why simple rules of thumb often fail in practice. The "right" answer for one person may be completely wrong for another, even with similar asset levels.

The Value of a Financial Plan
A comprehensive financial plan models all these variables together, showing you:

• Whether your assets will last throughout retirement
• Optimal withdrawal strategies for your situation
• Tax-efficient timing for conversions and Social Security
• How different scenarios affect your outcomes
• Where risks exist in your current approach

Without this integrated analysis, you're essentially guessing about the most important financial decisions of your life.

Taking Action
If you're approaching 60 and retirement, now is the time to address these questions. Don't delay your retirement due to uncertainty that proper planning can resolve. You've worked 40 years to build your nest egg—make sure you have a solid strategy for using it wisely.

Conclusion
Retiring at 60 or in your early 60s requires answering seven critical questions:

1. Where is your money? Understanding account types and optimal withdrawal sequencing
2. How is it allocated? Balancing growth and protection through sophisticated strategies
3. Should you do Roth conversions? Analyzing whether conversions fit your specific situation
4. What about healthcare? Navigating the gap between retirement and Medicare
5. What are your expenses? Creating realistic budgets that account for all spending
6. What are your income sources? Optimizing Social Security, pensions, and other income
7. How does it all work together? Integrating these decisions into a comprehensive plan

None of these questions exist in isolation. The answer to each affects the others, creating a complex web of financial decisions that determine whether your retirement succeeds or struggles.
The good news? With proper planning and professional guidance, you can navigate these complexities confidently. You've spent your life building assets—now it's time to build the plan that allows those assets to support the retirement you've earned.
Don't let uncertainty keep you from living the life you've worked toward. Address these questions systematically, create your comprehensive plan, and step confidently into your retirement years.

Ready to create your personalized retirement plan? Professional financial planning can help you answer these questions specifically for your situation and provide the confidence you need to retire successfully. Give us a call at jazzweath.com to learn more about award winning financial services!

​This guide is educational and not individualized financial, tax, or legal advice. For decisions affecting your finances, beneficiaries, taxes, or estate, consult a licensed fiduciary financial advisor, a board‑certified estate attorney, and a qualified tax professional who can evaluate your specific circumstances. This content is for educational purposes only and does not constitute personalized investment advice. Past performance is not indicative of future results. Before making any investment decision, consult with a qualified financial advisor who understands your complete financial situation.