A pocket guide to your money and personal finance at age 60 - aarp...

2. FIND BALANCE INVESTING IN YOU At least once a year you should rebalance your holdings so that you have the appropriate amount in stocks, bonds and cash (as well as all of their

subcategories) for your age and risk tolerance. This gets more important as you near retirement; should the market stumble, you have less time to make up what you've lost. That means

you not only want no more than 50 to 60 percent of your assets in stock, but you also want no more than 5 to 10 percent of your assets in company stock. The average for people in their 60s

is 7.3 percent. Scale back if you've got more than that. Not the rebalancing type? Put your money in a target-date retirement fund, which can automatically transition from stocks to

bonds as retirement looms. 3. BREAK THE RULE The financial industry has long rallied around the "4 percent rule," which states that your money should last 30 years as long as you

withdraw no more than 4 percent annually. But for people who retired right after the markets crashed in 2008, the rule doesn't seem to be holding up. One alternative: Convert 20 to 25

percent of your assets into an immediate annuity that will provide a fixed income stream for the rest of your life. "I prefer you do it after age 65, even 70," says planner Losey.

"The older you are, the shorter your life expectancy, the higher your payout." An annuity is essentially insurance, not an investment; it won't rise with inflation, and when

you die, the principal's gone. But an immediate income annuity will ensure that you won't outlive your money. "Because today's low interest rates are currently not

working in your favor, it makes sense to annuitize in chunks as you age," says Losey. "Then, you invest the remainder of your nest egg to provide the growth you need to keep up

with inflation." THE PLAN FOR HOW YOU SPEND 1. LOOK AT A MAP One way to dramatically lower your living expenses: Go somewhere cheaper. This doesn't have to mean moving across the

country, says planner Tim Maurer. Trading a high-tax school district for one nearby with lower taxes can make a substantial difference. If you're willing to go a few hours — say from

San Francisco, where the median home price is $685,000, to Carson City, Nev., where it's $140,000 — you can transform your standard of living. "This is the most powerfully positive

thing that someone can do to improve their retirement situation," says Maurer. WHAT WILL IT TAKE TO PAY OFF YOUR CREDIT CARD? FIND OUT NOW! 2. REIMAGINE YOUR LIFE (INSURANCE) Maybe you

first bought life insurance when you had a baby. Now the baby's in law school. Time to think about how much longer you'll need the coverage. If your obligations are behind you —

for example, your spouse could live on the money in the retirement accounts plus Social Security if you died, and the kids are on their own — then drop it. 3. THINK LONG TERM If you're

mulling long-term care insurance, your window is closing: The younger you are when you apply for coverage, the lower your premiums. According to the American Association for Long-Term Care

Insurance, a 60-year-old couple could get policies for about $155 a month each. The initial benefit of $162,000 grows to $329,000 for each individual when that person reaches 85. At 65, that

same policy will cost about $225 a month. Such policies can work for people worth more than $500,000 — too much to easily spend down to qualify for Medicaid, but less than the $3 million it

would take to fund their own continuing care. 4. NO, _REALLY_ LONG TERM Got great genes and fear outliving your savings? Longevity insurance is a less-expensive policy that won't pay

off unless you live, typically, to the ripe old age of 85. Then you'll start receiving monthly sums to help with your living expenses. Say at age 60 you buy a $50,000 policy from

MetLife. If you live to 85, you'll start receiving annual payouts of $15,862 if you're a man, $15,511 if you're a woman. Don't forget about inflation: This money would

only be worth $7,576 (man) and $7,408 (woman) in today's dollars. Some companies offer longevity insurance that has inflation protection. It's worth paying for.