3 Retirement Planning Tactics to Adopt Before You Hit 60

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A couple using a laptop togetherYou're in your 50s. Retirement is now a visible light at the end of the tunnel. You've worked hard and saved hard. But that might not be enough.

Nearly half of Americans in their 50s are at risk of experiencing a decline in their standard of living after they retire. To help ensure you're on the positive side of that statistic, implement these three retirement strategies before you hit the big 6-0.

1. Play catch Up

Wrinkles and gray hair are among the downsides of advancing age. But one benefit of getting older is being allowed to save more into your tax-advantaged accounts for retirement.

After your 50th birthday, you can make catch-up contributions to those retirement accounts: On top of the already-generous annual contribution limits ($17,500 for 401(k), 403(b), and 457 plans and $5,500 for IRAs for 2013) you can add an extra $6,500 every single year -- between these accounts -- until you retire.

2. Start moving money into a cash position

With a few years left until retirement, be sure to revisit your asset allocation. Now is the time to start moving a portion of your balances into conservative investments. That way, when you need the money five years down the road, you can be confident it'll be there for you.

Some of the best parking spots for your cash include money market accounts or CDs. Money market accounts are highly liquid and FDIC-insured.
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CDs currently pay close to 1 percent. A ladder of CDs may give you slightly higher returns while allowing you to take advantage of any interest rate increases. Bankrate.com can point you to some viable options.

Of course, be sure to keep a healthy chunk of your retirement account balances in the stock market. After all, those are the investments that'll allow you to buy gas and groceries in 20 years -- when goodness knows what it'll cost to fill up your tank and fridge!

3. Carefully craft your long-term care plan

People are living longer, healthier lives. But in the end, that means we more likely to last long enough to get worn out and need help with basic activities of daily living like bathing and dressing. And we might need that help for quite awhile. In the best of circumstances, Medicare only picks up a very small sliver of these costs, leaving you to foot the hefty bill and drain your retirement nest egg.

Long-term care is likely the most overlooked piece of one's retirement plan. Yet what's the point of amassing a huge pile of money for retirement if it'll all be wiped out by a prolonged long-term care event?

Alleviate the personal financial toll by buying a private long-term care insurance policy. (Check out the National Association of Insurance Commissioners and the American Association for Long-Term Care Insurance websites for tips and resources.) Keep in mind that premiums skyrocket after age 60. So if you're planning to buy this insurance (and qualify for doing so), now is the time to obtain your policy.

When shopping for individual policies, keep in mind that they can be very different from one insurance company to the next. Since each company may also offer policies with different combinations of benefits, be sure you're comparing apples to apples. You can compare plans and obtain quotes at LTC Tree. Also, make sure your insurance company is reputable and stable, so it'll be there when you need it.

If you don't qualify or aren't interested in securing a policy, then figure out how you'll fund and administer your personal long-term care plan. For example, which assets will you spend down to pay for your care? Will you rely on family and friends for care? If so, have you notified them of their responsibilities?

In the Blink of an Eye

You're in the homestretch of your race toward retirement -- but you're not there yet. You still have a few years to fine-tune your plan. By catching up your retirement contributions, moving money into a cash position, and crafting your long-term care plan now, you can increase your odds of making your golden years everything you hoped they would be.

Motley Fool contributor Nicole Seghetti writes about personal finance, retirement, and investing. Follow her on Twitter @NicoleSeghetti.
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