How Much Money Do You Need in Savings at Age 60?

By the time you hit 60, financial questions start to feel a little more urgent -- especially regarding your savings. You might be winding down your career or fully retired, and suddenly, the focus shifts to how much you've got tucked away for emergencies. But how much should be sitting in your savings account right now?

Let's clear up one thing right away: we're not talking about your retirement accounts here. Your 401(k), IRA, or any other tax-advantaged retirement account should contain money separate from your regular savings. Your savings account is for those everyday emergencies or big-ticket items that come up before you dip into retirement funds.

General savings guidance

At age 60, a solid rule of thumb is to have enough savings to cover six to 12 months' worth of living expenses. Why the larger amount than the common wisdom of three to six months? You're closer to retirement (or already there), and while it's great to have a consistent income through pensions, retirement account withdrawals, or Social Security, having a larger cash cushion ensures you're prepared for the unexpected.

To determine how much that means for you, calculate your monthly living expenses -- housing, utilities, groceries, insurance, transportation, and any ongoing debt payments. Multiply that by six or, if you want more peace of mind, by 12.

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For instance, if your monthly costs total $5,000, you should aim to have between $30,000 and $60,000 in your savings account. That's your cushion for unexpected expenses like home repairs, medical bills, or last-minute travel.

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Factors to consider

While having six to 12 months of living expenses rule is helpful, it's important to think about your specific situation at age 60 and how it might change your savings needs.

Healthcare needs

As you age, healthcare becomes more of a priority. If you don't have comprehensive insurance or a Medicare supplement plan, you'll want to pad your savings for unexpected medical expenses. Health emergencies can be expensive, even with insurance, so this is one area where having extra savings is a must.

Income changes

If you're retired, your income is likely coming from fixed sources like Social Security, pensions, or retirement account withdrawals. While these sources are steady, they're also limited. Without the flexibility of a regular paycheck, having more in savings can act as a buffer against unexpected costs.

Housing costs

Whether you're still paying off a mortgage, living in a rental, or own your home free and clear, housing costs can shift as you age. Maybe you're thinking of downsizing or moving closer to family. Any large housing change can require a chunk of savings for repairs, renovations, or a deposit.

Dependents or caregiving

If you're helping out adult children or providing financial support to aging parents, you may need to keep more in savings to account for those responsibilities. Providing care or financial help can quickly eat into your savings if you don't plan.

Beyond emergency funds

At 60, it's wise to consider extending your savings beyond an emergency fund. You're entering a new phase of life, and the unpredictability of healthcare costs, housing changes, or even lifestyle shifts should be part of your financial planning. Having extra cash on hand lets you avoid dipping into retirement funds too early or paying penalties.

You might also consider setting aside "lifestyle" savings. Whether it's funding travel adventures during retirement, tackling a long-put-off home renovation, or simply treating yourself, having a bit of fun money can make this phase of life more enjoyable. And remember, financial freedom also means being able to enjoy the fruits of your labor, so don't hesitate to build in room for joyful spending.

Your financial picture at age 60

At 60, the landscape of your finances is likely more complex. Retirement is either here or around the corner, and while your savings account is important, it's just one piece of your overall financial picture. Keep contributing to your retirement accounts, even as you move closer to tapping into them, and make sure you have a clear plan for how and when to start withdrawing from those funds.

One key point to remember: don't raid your retirement accounts for everyday emergencies. That's why it's important to have enough savings set aside. The goal is to keep those tax-advantaged funds growing for as long as possible so they can support you throughout your retirement years.

If you're still carrying debt -- like credit card balances or a mortgage -- consider focusing on reducing those liabilities. The less debt you have heading into retirement, the more freedom you'll have to use your savings for things that really matter.

Key takeaways

So, how much should you have in savings at age 60? While there's no one-size-fits-all answer, having six to 12 months' worth of living expenses in a savings account is a good rule of thumb. It provides enough of a cushion to handle unexpected expenses while you keep your retirement accounts intact.

Consider your healthcare needs, housing situation, income sources, and any caregiving responsibilities when deciding how much to save. If possible, aim to have a little extra for travel, hobbies, or other enjoyment -- you've earned it!

By having a well-rounded savings plan, you'll be better prepared to navigate this exciting and sometimes unpredictable stage of life with confidence.