How to Make Retirement Money Last

The average American spends 18 years in retirement. You want your retirement money to last all through your retirement years. Once retired, you will save some money on your work related expenses such as commuting and wardrobe. You also won't be paying Social Security taxes. However, plan on spending money for hobbies, trips and leisure. Therefore, it is important to make your retirement money last.

Difficulty: Moderate

Instructions

1. Review your finances. If necessary, set up a budget. Review your Social Security statement and your benefit statement from your employer and add up savings. Factor in your assets such as your 401K, IRAs, rentals, dividends and savings.

2. Determine your retirement needs and goals. You'll need 70 to 90 percent of your working income for retirement. Plan and adjust for inflation.

3. Be frugal with your savings. Spend your time doing the things you love to do without spending a lot of money. Try to find cheaper ways of doing what you like. If you like to read, join a local book club. Check the books out of the library. If you want exercise, join the local YMCA. If you love to travel, join an elder hostel.

4. Establish a withdrawal plan so your money doesn't run out. Take out less money now, so you have more for later. A safe withdrawal limit is 4 to 6 percent of your starting portfolio.

5. Develop a healthy lifestyle. You want to be healthy so you can enjoy your retirement. Eat a healthy and balanced diet and lose any extra fat. Start or continue exercising and if you smoke, it's time to quit. Get plenty of sleep and regular checkups and immunizations.

6. Visit a financial planner or professional. You may want to make changes to your investments now that you are retired. Invest your retirement money in FDIC insured banking products short-term. Options include U.S. Treasury Bonds, mutual funds that invest in bonds and annuities or CDs.

7. Eliminate debt. Shift to a low interest credit card and limit yourself to one card. Pay off high interest debt first.

Tips & Warnings

• If you can, get rid of the car. You will save money on gas and car insurance. If you need your car, just keep one vehicle.
• Financial professionals include a CPA for taxes and accounting, a financial planner for investments and insurance and financial analysts for investment. They will take payments by either fee or commission. Stockbrokers and insurance companies usually charge commission.
• Don't forget to budget for health care costs. Medicare is not free. You will pay premiums and deductibles. It also doesn't cover everything you may need including long-term care and long hospital stays. Get or keep supplemental health insurance.
• Be aware of frauds and people approaching you with deals boasting get-rich-quick plans or miracles cures. Gather printed material on legitimate sounding offers and look it over later. Don't promise anything. Check out businesses with the Better Business Bureau and investments with the Securities Exchange Commission.