Why Care?
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The decade of 60–70 is the most financially complex of your life: you're transitioning from accumulation to distribution, navigating Social Security, Medicare, RMDs, and sequence of returns risk simultaneously.
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The order in which you draw down different accounts (taxable, tax-deferred, Roth) has significant tax implications. Withdrawal sequencing can save tens of thousands in taxes over a 20–30 year retirement.
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Sequence of returns risk — the danger of a major market decline early in retirement — is at its peak in this decade.
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Medicare enrollment at 65 has strict enrollment windows. Missing them results in permanent premium penalties.
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Required Minimum Distributions (RMDs) begin at age 73 for most accounts. Planning for the tax implications needs to start well before they begin.
Top Tips:
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Develop a written retirement income plan. Know which accounts you'll draw from first, when you'll claim Social Security, how much you'll spend, and what you'll do in a down market.
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Enroll in Medicare on time. The Initial Enrollment Period is the 7-month window around your 65th birthday. Missing it triggers lifelong premium penalties for Part B and Part D.
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Understand RMD rules. At 73, you must begin withdrawing from Traditional IRAs and 401(k)s annually. The penalty for missing an RMD is significant.
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Build a cash buffer. Keeping 1–2 years of expenses in cash or short-term bonds reduces the need to sell equities during market downturns.
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Delay Social Security to age 70 if possible. The 8%/year delayed credit between Full Retirement Age and 70 is one of the best guaranteed returns available.
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Review beneficiary designations on all accounts. Retirement accounts pass via beneficiary designation — not your will. Ensure they reflect your current wishes.