Your 70th birthday is a major milestone in your life. From a financial perspective, you now qualify for the highest Social Security benefits (if you waited to claim Social Security at 70) thanks to delayed retirement benefits and, if you worked until this age, potentially more higher-earning years, which can also translate to a higher Social Security check. But it can also be a rough transition for retirees, who’ve spent decades saving up for this moment and now find it surprisingly difficult to watch their retirement savings go down — even if you’ve done all the planning and triple-checking to make sure your withdrawal amount is sustainable. Whether you’re worried about running out of money in retirement, overwhelmed by estate planning, or just generally unsure of how you should be approaching retirement planning when you’re already retired, here’s a financial checklist for your 70s to help you stay on track and feel more confident about enjoying your money. 1. Create a realistic spending plan and then spend your money(Image credit: Getty Images)When you’re still working, retirement planning is about identifying a healthy target number to save that will give you the lifestyle you want. By your 70s, “Retirement planning should be less about putting life on hold in the name of preservation and more about funding the experiences, and legacy that matter most,” Nancy Anderson, Director of wealth planning programs at Key Private Bank, told Kiplinger.While coming up with an annual spending amount on paper is fairly straightforward, shifting from a saving mindset to a spending mindset is much harder. To help make that behavioral shift, Anderson recommends:Create separate accounts for separate expense categories. As cash comes in from Social Security, distributions, and other income sources, fund your household expenses account first. Then, put the amount you’ve allocated for travel and hobbies in a separate account. That way, you can be confident that your essential costs are covered and you can see at a glance exactly how much you can afford to spend on travel and hobbies. “Knowing that money has been earmarked for a specific purpose can make spending feel more comfortable and intentional,” Anderson explained.Claim Social Security now if you haven’t already. While delaying Social Security can increase your benefits by up to 24%, “waiting beyond age 70 does not create additional value,” she said. This guaranteed income isn’t vulnerable to market volatility and can give you a spending floor — the minimum you’ll be able to spend each month even if all of your other assets disappeared.Make a plan for required minimum distributions (RMDs). These kick in in your mid-70s and often catch retirees by surprise, warned Anderson. This can throw off your tax planning by increasing taxable income if you don’t plan ahead for it. But there are strategies you can use to mitigate that if you get a plan in place before they kick in.Review your withdrawal amount annually. Your annual withdrawal amount isn’t a “set it and forget it” number. Anderson recommends reviewing your spending amount annually to make sure it’s still sustainable. “An annual review provides an opportunity to adjust spending based on market performance, inflation, and personal circumstances,” she said.2. Stress-test your finances annually(Image credit: Getty Images)In addition to reviewing your withdrawal amount annually based on current market conditions and personal needs, Anderson recommends stress-testing your finances against possible future risks. “Running stress tests that account for market volatility, inflation, healthcare costs, and longevity can help identify potential shortfalls before they become serious problems,” she noted. By examining all the “what if” scenarios you can think of, you’ll see exactly how long your savings would last in each one. More importantly, you’ll be able to come up with contingency plans and adjusted spending limits that account for those various risks.”In many cases, relatively small changes can significantly improve long-term outcomes,” Anderson said. By running these stress tests annually, you can anticipate problems before they become serious and, in many cases, avoid needing to make drastic changes to your spending. “The sooner adjustments are made; the more options are available and the less dramatic the changes typically need to be,” she noted. This habit will replace those vague fears of running out of money with a concrete picture of how your savings would actually hold up under different scenarios and what adjustments you can make to address specific threats.3. Plan your retirement in five-year chapters(Image credit: Getty Images)The biggest risk in retirement isn’t necessarily running out of money, according to Anderson. “Sometimes, it’s about reaching a point where you no longer have the health, energy, or opportunity to do the things you want to do.”That’s why she advises clients not to assume spending will remain constant from age 70 to 100. Instead, she recommends planning in five year chapters. Start by funding the experiences and bucket list adventures you know you’ll regret postponing if health or other circumstances prevent you from being able to enjoy them later. “Many retirees spend more in the initial phase because they have greater flexibility and often want to travel, pursue hobbies, or enjoy experiences they postponed while working,” she said. That higher spending up front might make you anxious if you’re stuck in that saving mindset. But when you factor that into the plan by planning in five-year chapters and back it up with those annual reviews and stress tests, you can be confident that your overall spending plan is sustainable. Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals. Subscribe to Kiplinger’s free newsletter, A Step Ahead.4. Put fraud protections in place before you’re targeted(Image credit: Getty Images)That generous nest egg you worked so hard to build makes you an attractive target to scammers and fraudsters. It also puts you at heightened risk of financial abuse — especially as you get older and start relying more on family to make financial decisions for you. “Cognitive decline does not need to be severe before financial judgment begins deteriorating,” warned Evan Farr, Certified Elder Law Attorney and retirement planner practicing in Virginia, Maryland, and DC.Even before cognitive decline hits, modern technology is making scams harder to spot. So, taking proactive steps now can go a long way toward protecting yourself in the future. Some of the most effective strategies to do that, according to Farr, include:Enable transaction alerts on your bank and brokerage accounts so you can catch suspicious activity promptly.Set up multi-factor authentication on all of your financial accounts.Learn how to freeze your credit now so you can do it quickly when necessary.Make a rule that you’ll discuss all major transfers or investment decisions with a designated trusted person, such as your financial planner or attorney, before taking action.Designate a trusted contact to be notified of suspicious transactions. Most major financial institutions will allow you to note this on your account so that if a bank representative notices signs of a scam, exploitation, or fraud, they can reach out to this trusted contact.Sign strong power of attorney paperwork now and make sure the person you name has the integrity and capacity to take on that responsibility.Be cautious about adding family members as joints on your accounts. Even if you trust the person fully, doing so can create conflicts later around ownership and inheritance that you never intended.5. Reduce unnecessary financial complexity for your heirs(Image credit: Getty Images)”Many people by age 70 have accumulated numerous bank accounts, brokerage accounts, retirement accounts, insurance policies, real property holdings, past beneficiary designations, passwords, and/or decades of documentation,” Farr told Kiplinger. While this might not be a problem for you, it can be a confusing maze of accounts and records to sift through for your heirs. Farr recommends clients simplify their financial affairs as much as possible and leave a roadmap to make it easier for heirs to know what’s what and where to look. That includes consolidating unnecessary accounts and maintaining an up-to-date account of assets and passwords. It can be helpful to do this with a financial planner so you can spot any old 401k or other accounts you might have forgotten about. Lastly, Farr said to make sure you “inform those who will act on behalf of your client during incapacitation that the documentation exists and how they can obtain access to it.”6. Get more specific with your estate planning(Image credit: Getty Images)In the past, it may have been enough to simply name a beneficiary or have a general plan for how your assets would be split up among heirs. As you get older, it’s time to get more specific with your estate planning to prevent unnecessary conflict or obstacles when carrying out your final wishes. According to Farr, “While it was previously sufficient to ask who would receive the decedent’s assets upon death, today the decedents’ estates must address how the assets will pass, who will administer matters should the decedent become incapacitated, whether probate may be avoided, whether an inheritance should pass directly to beneficiaries or remain protected within a trust arrangement(s), and whether the estate plan will lead to conflict amongst the beneficiaries.”You deserve to enjoy the retirement you saved up forIf you’ve been feeling too nervous to actually splurge on vacations or start embracing all of the hobbies and experiences you promised yourself you would enjoy once you retired, know that a lot of retirees struggle with that same anxiety. But, by following the steps in this checklist every few years, you can ensure that the “permission to spend” amount you’re working with truly is sustainable and that you’ll be able to catch any shortfalls or issues early to adjust your spending long before you run any real risk of outliving your savings. Doing the above steps with the help of a financial planner can help ease those fears even more as you’ll know that an outside expert helped you come up with that realistic, sustainable spending amount. Use the tool below to connect with a vetted financial professional who can help you stay on track and make the most of the retirement you planned for:Related contentA Financial Checklist for Your 50sAn Essential Money Checklist For Your 40sA 5-Part Financial Checklist for Your 30sAn Expert Guide to Your Financial Priorities Decade-by-Decade
