9 Clues You’re Financially Ahead of the Typical 60-Year-Old

By the time you reach 60, retirement is getting close, so it’s important to know whether your finances are in good shape for what comes next. Recent Empower data puts the median retirement savings for people in their 60s at $568,450, meaning anyone above that mark is ahead of more than half of their peers. Net worth, however, may be far lower than many people assume.

Comparing your situation with others in your age group can be a useful reality check. Here are nine signs you may be doing better financially than the average 60-year-old in the U.S.

Your retirement savings are above $568,450

If your retirement accounts hold more than the median $568,450, you’re ahead of half of people in their 60s.

You may still need to build more to reach your ideal target, but many Americans are not even sure they can retire. There is also still a chance to make up ground, since the IRS allows larger 401(k) catch-up contributions for people ages 60 to 63.

Your net worth tops $411,900

For people ages 55 to 64, the median net worth was $411,900, according to the latest Federal Reserve Survey of Consumer Finances. A higher net worth can improve your financial stability in your 60s and give you more room to maneuver. To calculate it, add up your home, vehicles, retirement accounts, savings, and other assets, then subtract your debts.

You carry little or no consumer debt

Experian data shows that the average Gen Xer, ages 45 to 60, owed $9,600 in credit card debt, while total debt averaged $158,105 for that group.

Debt can be stressful at any age, but it becomes even more of a burden as retirement approaches and income is expected to come from a fixed source. Interest charges add up, and monthly payments can strain your budget. If your debt is well below those figures, or gone altogether, you’re in a strong position.

You have more than $250,000 in home equity

U.S. Census Bureau data found that the average person ages 55 to 64 had $250,000 in home equity. If your home’s value minus your mortgage leaves you with more than that, you’re doing better than many people your age.

Whether you plan to downsize or tap your home for cash, equity can be a valuable asset as retirement nears. Paying down your mortgage to build even more equity is also a smart move.

You aren’t in a hurry to claim Social Security at 62

Taking Social Security at 62 can seem tempting, but the best claiming age deserves careful thought if you want to stay ahead of many other pre-retirees. Without the right timing, your benefits may not go as far as you expect.

The average monthly Social Security check will be $2,170 after a cost-of-living adjustment. Claiming at 62 permanently reduces your benefit by about 30%, and that can also reduce your spouse’s benefit significantly. Waiting until full retirement age of 67 locks in the full amount, and delaying until then can increase your benefit by up to 24%.

You have a plan for health insurance before Medicare

Many people in their 60s are still working and getting coverage through an employer. But if you plan to retire before Medicare begins, having a strategy for affordable health insurance puts you ahead.

The Affordable Care Act Marketplace can be a good starting point, especially if your income makes you eligible for subsidies. You could also explore private coverage through insurers or consider part-time work that includes benefits.

You understand what retirement will cost

A recent Schroders survey found that many retirees are unsure how long their savings will last, and nearly half say they are spending more than expected.

It’s easy to underestimate retirement expenses or save too little while you’re working. Using a rule of thumb such as the 4% rule, or plugging your own numbers into a retirement calculator, can give you a clearer picture and help you avoid that mistake.

You have money outside tax-deferred accounts

Traditional IRAs and 401(k)s are useful because they let you defer taxes on contributions and investment growth while you are working. But after age 59 ½, withdrawals from these accounts usually trigger taxes.

Having additional savings vehicles, such as a Roth IRA, can give you more flexibility than many savers have. For example, qualified Roth withdrawals can be tax-free, and required minimum distributions often do not apply in the same way.

You could cover a major surprise expense without taking on debt

Car repairs, medical bills, and other unexpected costs can still happen in your 60s. If you have an emergency fund with at least three months of normal expenses saved, you’re ahead of many Americans your age.

That cushion can bring peace of mind by letting you handle emergencies without relying on costly new debt. A high-yield savings account can be a good place to keep that money.

The bottom line

These benchmarks can help you gauge how you’re doing, but “average” is only a comparison point, not a final goal.

Review your retirement plan to make sure you are saving enough for your expected lifespan, desired lifestyle, income sources, and other priorities. It can also help to use a Social Security estimator and consult a financial advisor.

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