12 steps you must take at age 60

By Liz Pulliam Weston

As you round the corner into your 60s, your headlights probably are focused on one goal: retirement. The life of leisure and freedom the rest of us are still working toward is now within your grasp.

Maybe.

The problem with many folks at 60 is that they develop short-timers' syndrome, says Certified Financial Planner Sheryl Garrett, founder of the Garrett Planning Network. They're so eager to abandon the workplace that they don't focus enough on the details of how, or even whether, their retirement plans actually will work.

That could lead to disaster. You don't want to find out a few months before your retirement party -- or worse, a few months after -- that you really don't have the money to retire.

"In most cases, once you leave, you can't go back. That's it," said Garrett, co-author of the financial planning book "Just Give Me the Answers."

If you will need to work longer, "it's better to swallow that earlier rather than later."

Here's your game plan for turning 60:

Zero in on a retirement date

To start doing the math, you'll need to have a target retirement date, because how much money you'll need and how much you'll get (from Social Security and other options) depends on this. But you need to stay flexible, in case the day you'd like to quit working -- or phase into part-time work -- turns out to be too early.

Working even a year or two extra can boost your nest egg and increase your retirement income enormously. But there's also no point in hanging around longer than you have to.

Figure out where you're going to live

Will you stay put in a paid-off home or will you still have a mortgage? Will you move to a cheaper area or downsize to a smaller place? Or will your move be lateral, to an equally expensive (if lower maintenance) condo or retiree village?

Where you spend your retirement will have a huge effect on how much income you'll need. If your retirement plan doesn't pencil out one way, you may need to consider other alternatives. Although more than 80% of retirees "age in place" -- living in the same house in which they retired -- moving to a cheaper area or downsizing to a smaller house can free up home equity for investments or income.

Thinking about tapping your equity through a reverse mortgage? These mortgages, which give you a lump sum, a line of credit or a stream of monthly checks, don't have to be paid back until you die, sell the house or move out permanently. (You can learn more at AARP.) But the amount you get is inversely proportionate to your age: The younger you are, the less you get. That's why the typical age for getting a reverse mortgage is about 75, and why real-estate expert Tom Kelly doesn't typically recommend them when you're in your 60s unless you have no other choice.

"I believe people in their 60s … simply don't qualify for enough cash under the present (reverse mortgage) programs," said Kelly, author of "The New Reverse Mortgage Formula."

Then again, a reverse mortgage may be the best of bad options if you can no longer work and your retirement income isn't enough to pay the bills.

"There's a needs-based group -- some folks have no other option to pay for meals and meds (or) a new roof," Kelly said. "This group doesn't really care how much it costs to get the (reverse mortgage); they simply need it now."

Consider long-term-care insurance

As I wrote in "8 money moves you must make at 50," there is no expert consensus on when you should buy this coverage, if you buy it at all. Consumer Reports doesn't recommend the coverage before age 65, but adviser Robert Pagliarini, a certified financial planner and author of the book "The Six-Day Financial Makeover," prefers his clients buy a policy before they turn 60.

"Unfortunately, the longer you postpone the decision, the greater your chances of suffering an illness or developing a condition that will disqualify you from coverage or cause the premiums to be too expensive," Pagliarini said. In the 60-to-65 age range, "rates will not necessarily be attractive, but they should still be reasonable." In the 65-to-70 age range, "premiums start going up dramatically."

Do some serious research before you buy: Look for companies with sound financial ratings from TheStreet.com, Fitch, A.M. Best or Standard & Poor's and review the insurers' complaint records with your state insurance regulator. The National Association of Insurance Commissioners, a group that represents state insurance regulators, offers a free brochure, "A Shopper's Guide to Long-Term Care Insurance," that you can order.

Don't forget to include medical costs

Paying for health insurance before age 65, when you qualify for Medicare coverage, can be extremely costly (again, see "8 money moves you must make at 50" for details).

But even once you qualify for Medicare, your expenses aren't over. Garrett's parents, who are relatively healthy folks in their 70s, pay a combined total of $1,000 a month for Medigap insurance, which covers many of the expenses Medicare doesn't, and out-of-pocket costs including co-pays and drugs.

Deal with your debt

Ideally, you'll enter retirement with no debt, but you definitely want to blitz any credit card balances or other consumer loans before you get there.

If you're having trouble paying off this toxic debt, contact a legitimate credit counselor (one affiliated with the National Foundation for Credit Counseling) or a bankruptcy attorney to discuss your options.

Draw up a retirement budget

Now that you're almost at the finish line, you can replace the usual retirement rules of thumb ("plan on spending 70% to 80% of your pre-retirement income") with concrete figures. MSN's Retirement Expense Calculator can help.

Not sure if your budget will work? You might take it on a trial run for a few months by living with it as if you really were retired (just keep showing up for work).

Review your Social Security and pension options

You can draw on Social Security as early as age 62, but the longer you wait to start taking payments, the bigger your benefit checks will be. You can check your annual Social Security benefit statement (which you should receive about three months before your birthday) for the amount of your expected checks starting at various ages.

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