Key Takeaways
- Many vital life modifications happen at age 70+, many with monetary implications.
- Older adults may be grouped into three classes: “younger previous,” “previous,” and “previous previous.”
- Many monetary transitions are tied to particular ages (e.g., RMDs, Social Safety, QCDs).
- New first-time bills and new housing selections usually happen at age 70 and past.
- Many older adults have elevated curiosity in simplification and philanthropy.
There are 20 years in individuals’s lives the place they expertise a whole lot of modifications: their 20s, as they transition to unbiased dwelling, and their 70s, once they expertise many new life transitions associated to the growing older course of.
Psychologist Bernice Neugarten described three phases of older maturity: “Younger Previous” (ages 65 to 74), “Previous” (ages 75 to 84), and “Previous Previous” (age 85+). Monetary writer Michael Stein coined the phrases “Go-Go” years,” “Gradual-Go” years,” and “No-Go” years,” respectively.
Someday throughout their 70s, older adults cross over into the second section of older maturity, the place they expertise new monetary challenges which may embody incurring new debt.
Fifteen transitions skilled by septuagenarians (individuals age 70 to79) are described under:
Social Safety Advantages
- Advantages ought to be claimed by age 70 as a result of delayed retirement credit not apply after this.
- At age 70, staff obtain 132% greater than their full retirement profit if their full retirement age (FRA) is 66 and 24% extra if their FRA is 67 (individuals born in 1960 and later).
- Continued work at age 70 and past might enhance advantages if earnings are greater than low-earning years in younger maturity. Advantages are primarily based on the very best 35 years of earnings.
Required Minimal Distributions (RMDs)
- RMDs are obligatory, formula-based withdrawals from tax-deferred plans (assume conventional particular person retirement accounts—or IRAs—and 401(ok) and 403(b) plans funded with pre-tax {dollars}). They need to start someday throughout one’s 70s.
- The beginning age for RMDs is age 73 for individuals born from 1951 to 1959 and age 75 for these born in 1960 and later.
- Odd earnings taxes are owed on pre-tax financial savings plan contributions and retirement plan earnings.
Younger Previous (Go-Go) Mindset (Early 70s)
At age 70, individuals begin to marvel what number of “good years” (with vitality, mobility, good well being) they’ve left to journey, work, volunteer, and revel in hobbies, sports activities, and leisure. Consequently, many “young-olders” attempt to pack as a lot as doable into their remaining “go-go” years and aggressively work on their “bucket listing.”
Go-Go to Gradual-Go Transition (Mid to Late 70s)
The reason why individuals decelerate throughout their 70s embody well being and/or mobility points (themselves and/or a partner) and widowhood, which leads to the lack of a journey companion. Consequently, they might reduce on actions and select much less energetic socialization strategies (assume poker as a substitute of pickleball).
Analysis signifies that family spending usually decreases in comparison with Go-Go years. Lowered spending can assist offset a number of the impacts of excessive inflation.
New Bills
Septuagenarians might incur the next bills for the primary time: listening to aids, walkers and wheelchairs, dentures, garden care and housekeeping companies, and the necessity for in-home well being care and/or long-term care.
Lasts and ROLE Calculations
Of their 70s, individuals’s time orientation modifications. As I describe in my e-book, Flipping a Swap, they begin doing “return on life expectancy” (ROLE) calculations (evaluating how lengthy issues—e.g., a pet or equipment—will final in relation to their age and life expectancy) and interested by lasts (e.g., final pet or final automotive).
Simplification and Downsizing
An eighth decade of life and forthcoming RMDs might improve the sense of urgency to simplify. Methods to do that embody:
- Gifting, promoting, and/or donating undesirable gadgets
- Closing subpar accounts (e.g., excessive expense mutual funds and low APY financial savings accounts)
- Shredding pointless paperwork
- Consolidating “like” property (e.g., a number of particular person retirement accounts)
New Housing Decisions
It isn’t at all times doable to “age in place.” Life occasions skilled at age 70+ (e.g., poor well being, grey divorce, widowhood, lack of earnings) might precipitate new housing preparations.
Frequent selections in later life embody: transferring nearer to household, multi-generational housing with relations, shared housing with siblings or mates, staying put with a reverse mortgage to assist pay bills, an assisted dwelling facility, or a unbroken care retirement neighborhood (CCRC).
Elevated Threat of Diminished Capability
The danger of delicate cognitive impairment (MCI) and dementia will increase with age and accelerates within the mid- to late-70s. Problem with monetary administration (e.g., invoice paying, and balancing a checking account), problem-solving, and decision-making are frequent “purple flags” properly earlier than the onset of a critical cognitive sickness. For that reason, trusted contact info ought to be supplied for monetary accounts and advisors.
Shortened Funding Time Horizon
Folks age 70+ don’t have as a lot time for market rebounds vs. youthful traders. However, their funding time horizon is their remaining life expectancy. A wholesome 70 12 months previous may reside to age 90, 95, or older, which is loads of time to experience out market volatility. Traders are typically suggested to cut back the proportion of their portfolio in shares as they become older.
Earnings Taxes
Septuagenarians might discover themselves paying greater taxes on a better taxable earnings when RMD withdrawals start. As well as, a better tax bracket and earnings taxes usually outcome following widowhood with a change in submitting standing from married submitting collectively to single.
Instance: In 2025, {couples} are within the 12% tax bracket with an earnings as much as $96,950. For single taxpayers, the 12% tax bracket ends at $48,475 earlier than transferring as much as the 22% tax bracket.
Older single taxpayers additionally face decrease “set off” quantities for earnings tax on Social Safety advantages, the IRMAA surcharge for Medicare premiums, and the online funding earnings tax (NIIT).
Legacy Planning and Philanthropy
The phrase “You possibly can’t take it with you” takes on a heightened that means as individuals become older. That is very true for individuals who understand they’ve sufficient saved to not run out of cash. Individuals who have been “lukewarm” donors to charities might step up donations at age 70+. Methods to get a tax profit for charitable presents embody “bunching” itemized deductions (together with charitable presents), gifting appreciated securities, and establishing a donor suggested fund (DAF).
Certified Charitable Distributions (QCDs)
When older adults attain age 70 ½, they’re eligible to donate cash immediately from a standard IRA to a tax-qualified charity through a QCD. QCDs take away funds from a standard IRA earlier than RMD age (i.e., between age 70 ½ and age 73 or 75) or rely towards a taxpayer’s obligatory RMD withdrawal as soon as RMDs have begun. The utmost QCD quantity in 2025 is $108,000 per particular person.
Closing Monetary Hole Years
The monetary “hole years” are the time between age 59 ½, when the ten% penalty on early distributions not applies, to RMD age. At age 70, individuals nonetheless have 3 or 5 monetary hole years remaining. Generally beneficial tax discount methods throughout this time interval embody:
- Roth IRA conversions in levels over a number of years while you’re in a decrease tax bracket.
- Realizing long-term capital good points and redeeming U.S. financial savings bonds earlier than RMDs start.
- Utilizing QCDs to cut back conventional IRA property topic to RMDs.
- Take into account taking taxable distributions earlier than RMDs should start to unfold the tax legal responsibility over an extended time interval.
Lengthy-Time period Care Planning
Folks of their 70s and past understand they don’t seem to be getting any youthful or sharper. It’s time to carry long-postponed conversations about bequests to heirs, end-of-life care, caregiving expectations, burial needs, and extra. Additionally it is time to be sure that a long-term care (LTC) plan is in place. Choices for long-term care planning embody the next:
- An extended-term care insurance coverage coverage, ideally bought by one’s late 50s or 60s. By age 70, premiums are very excessive and LTCI might not even be accessible attributable to well being points.
- Self-insurance with earmarked property (e.g., 3 years of care @$100,000 = $300,000).
- Self-insurance with assured earnings sources (e.g., pension, Social Safety, annuity).
- Deliberate reliance on Medicaid and/or relations (you’ll want to focus on this with them!)
- A CCRC for a continuum of care from unbiased dwelling to expert nursing, if wanted.
Private finance may be advanced after age 70. When you have questions and considerations, contemplate reaching out to a authorized or monetary skilled (e.g., a fee-only monetary planner) who can help you. If excessive debt is a matter, contemplate choices like credit score counseling, the avalanche and snowball strategies of accelerating debt compensation, debt consolidation, and debt settlement.
