Nearing Retirement

    How to make sure you're on track

    The closer you get to retirement, the more important it is to be realistic about your goals and savings. By taking a close look at where you stand now, you can make changes to stay on track—or catch up if you need to. 

    Here's what we recommend: 

    • Check and update your plan

      If you don’t have a retirement plan, now is the time to create one. If you do, check it at least once a year to make sure it matches your needs and goals.

       

      You might need to update:

       

      • Your expected retirement date
      • How long you expect to be retired
      • Your expected expenses (for needs, wants and wishes) 
      • Your expected savings and income sources
    • Update your portfolio

      Make sure your portfolio still makes sense for you by checking it at least once a year, too.

       

      Things that can change as you near retirement include: 

       

      • How much risk you're comfortable with
      • Your asset allocation Tooltip
      • Diversification Tooltip of investments in your portfolio
      • Your plan for regular rebalancing Tooltip
    • See where you stand

      Enter information from your plan into our retirement savings calculator to see how you’re doing and catch any gaps now.


    What to do if your savings need a boost

    Whether you’re in catch-up mode or just want to sock away as much as possible before you stop working, there are things you can do to help your nest egg grow.

    First, contribute as much as you can to your employer-sponsored account—401(k), 403(b), 457(b) or Thrift Savings Plan. In 2019, you can contribute up to $19,000. If you're at least 50 or will be by year's end, you can also make a catch-up contribution of $6,000, for a total of $25,000.1

    Once you’ve maxed out your employer-sponsored account—or if you don’t have one—consider saving and investing more with a traditional or Roth IRA or a brokerage account. If you’re eligible, you can also use a Health Savings Account (HSA) to save for future health care costs.2  

    Learn more about your account options, including tax and eligibility information.


    Key facts about Social Security

    The age you become eligible for Social Security—also called your full retirement age—depends on when you were born.

    If you were born in… Your full retirement age is…
    1943-1954 66
    1955 66 and 2 months
    1956 66 and 4 months
    1957 66 and 6 months
    1958 66 and 8 months
    1959 66 and 10 months
    1960 or later 67

    Source: Social Security Administration

    Did you know waiting can increase your benefit?

    Once you start taking Social Security, you’ll receive monthly checks for as long as you live. You can start taking it as early as age 62. But you’ll receive a smaller check each month than you will if you wait until your full retirement age. 

    If you wait until after your full retirement age, your Social Security income will increase up to 8% for every year you delay, up to age 70. After age 70, there’s no further increase for delaying. 

    Learn more about how to decide when to take Social Security benefits.


    How to plan for future health care costs

    Wondering about the best way to cover retirement health care costs? Medicare is a big piece of the puzzle—but it doesn’t start until age 65, won’t cover everything, and has out-of-pocket costs.

    With Medicare or other health insurance, your costs will include insurance premiums and out-of-pocket expenses your insurance doesn’t cover, like a deductible, co-pays and coinsurance. 

    In general, here's what you can expect to pay before and after Medicare kicks in: 

    Source: Schwab Center for Financial Research. These estimated costs are for general informational purposes only and should not be considered an individualized recommendation or a personalized estimate. Your health care costs will depend on a number of factors, including inflation and your specific situation. For specific advice, we recommend consulting with a financial planner.

    Here are five things you can do now to prepare for retirement health care costs.


    How to transition from saving to living off your savings

    Many people say the transition from saving to living off their savings is one of the biggest challenges of retirement, due (at least in part) to complex tax rules and uncertainty around how long their money will last.

    The key to making it smoother? Planning. But where should you start?

    Here’s what we recommend, before you retire: 

    How to transition from saving to living on your savings

    • Get to know your retirement income sources

      Include all retirement, bank and brokerage accounts, plus other income (like Social Security, a pension, annuities or HSA funds you’ve saved for future health care costs). Make sure you know:

       

      • How much you’ll receive from each source
      • When you can withdraw your money (take distributions) without a penalty
      • How each source will be taxed
    • Take a close look at your expenses

      Include money for needs (like food, housing and health care), wants (like travel and entertainment) and wishes (like gifts or a second home). Ask yourself:

       

      • Should I pay off my debt or mortgage before I retire?
      • Should I relocate or downsize to reduce costs?
      • Am I considering health care costs (before and after age 65)? 
    • Start planning your retirement income

      Income and expenses are a good place to start. But to make sure your money will last as long as you need it to, you’ll need a more comprehensive planYour plan should help you determine:

       

      • How much you can spend 
      • How to invest 
      • How to get your money when you need it
      • How to stay on track over time 

       

      To connect all the dots in tax-smart ways, consider working with a financial planner, tax advisor or both.


    What you can do next