A 66-year-old Reddit user recently shared a dilemma in the r/retirement subreddit: Should they reduce retirement contributions in their 60s to enjoy life more while they're still working?
They referenced Jamie Hopkins' advice in "How to Retire," which suggests that once you reach 62, you might want to stop aggressively saving and start spending a little more. The idea is simple: Don't wait until retirement to enjoy life—because there's no guarantee you'll be healthy enough to do so.
This particular Redditor is in good financial shape and able to retire next year according to their planner, in excellent health, and genuinely enjoys working. Still, after seeing a family friend diagnosed with terminal cancer at 62, they're wondering if they should scale back on savings and take a few extra luxury vacations while they still can.
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What Other Retirees Had to Say
The responses were mixed. Some people encouraged them to start spending now, arguing that life is unpredictable. One user, also in their 60s, said they gradually phased out contributions over the last few years and found it to be a smooth transition. Others shared personal stories of health scares that made them rethink delaying their retirement dreams.
But not everyone agreed. A few commenters pointed out that if they don't need the extra money now, why not keep saving while they're still working? There's also the tax angle—maxing out pre-tax contributions today could lower their taxable income, reducing their tax bill.
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Should You Cut Back on Retirement Contributions in Your 60s?
There's no one-size-fits-all answer, but financial experts suggest considering a few key factors:
- Do You Have Enough Saved for Retirement?
If you're on track to retire comfortably, then pulling back on contributions could make sense. But if you're still catching up, those extra contributions—especially catch-up contributions—can go a long way.
According to Charles Schwab's SCHW 2024 401(k) Participant Study, most Americans believe they need $1.8 million to retire comfortably. However, some financial gurus like Suze Orman warn $2 million is "pennies" in today's world. Others like economist Andrew Biggs argue you can get by on $50,000 to $100,000.
- How's Your Health?
If you're in great health and expect to work several more years, there's no rush to start spending. But if you have health concerns, it might be wise to prioritize experiences now.
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- What's Your Tax Situation?
If you're contributing to a pre-tax 401(k), cutting back now could mean paying higher taxes on your income today. Some people choose to shift contributions to a Roth 401(k) or even a taxable brokerage account for more flexibility.
- Do You Have an RMD Strategy?
Required minimum distributions start at age 73 for most people, which means you'll have to start withdrawing from traditional retirement accounts whether you want to or not. Some retirees reduce pre-tax contributions and switch to Roth accounts to avoid a big tax bill later.
If you're financially secure, still working because you enjoy it, and have more money than you realistically need for retirement, cutting back on contributions to enjoy life now isn't a bad idea.
However, if you're unsure whether you've saved enough—or if you'd be giving up important tax advantages—it's worth running the numbers with a financial advisor before making any big changes.
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