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7 Ways to Make Your Retirement Savings Last

If you reach age 65 today, you can expect to live until you’re 84.3 years old if you’re a man and 86.6 if you’re a woman, according to the Social Security Administration. A 2017 GOBankingRates study revealed, however, that only 29 percent of respondents had more than $100,000 in retirement savings. Breaking down the retirement savings by age, 29 percent of baby boomers still had nothing saved, and more than half had less than $100,000 saved.

To avoid retiring with nothing to live on, you need to start saving now — and start planning how you’re going to stretch those funds to last you through your golden years. Read on for seven ways to make your retirement savings last.

1. Ease Your Way Into Retirement

Instead of cutting off your career completely — especially if you’re taking early retirement — keep working on a part-time basis even if you’ve reached retirement age; this way, you can take retirement for a test drive. By continuing to earn at least a portion of what you’re used to making, you can reduce or eliminate the chances you’ll need to tap into your retirement fund early and you can postpone claiming your Social Security so you’ll receive higher benefits down the road. In addition to providing a continued stream of income for yourself to reduce how much of your nest egg you need to tap, phasing your way into retirement can help ease your transition from working full-time to not working at all.

“My advice is to get a feel for your income versus expenses and gradually add the activities that you have looked forward to into the income and expense flow,” said Frank Drago, president of Citizens Securities Inc. “After working for 30 to 40 years, the tendency is to fill the time with vacations, shopping, increased golfing or other activities — all of which cost money.” Before committing to being retired, workers should first get a good feel for what their ordinary day would look like in retirement, Drago said.

2. Delay Claiming Your Social Security Benefits

If you decide to keep working, consider not collecting your Social Security benefits until you turn 70. Delaying them until this age can mean up to an 8 percent higher annual payout in your benefits.

Although you can begin collecting Social Security benefits nearly a decade earlier at age 62, if you’re healthy, able to work and have a job, don’t be so quick to cash in those benefits if you don’t need to. That said, the Social Security Administration won’t give you any extra credit for delaying your benefits once you’re over 70.

Learn: 7 Retirement Planning Tips to Help You Fund Your Golden Years

3. Incorporate Roth Accounts into Your Retirement Plan

Contributing money to a Roth IRA or Roth 401k allows your money to grow tax-free — and your qualified distributions to come out tax-free — in retirement. With traditional accounts, you receive a tax deduction for your contributions, but you pay income taxes on your distributions.

In addition, Roth IRAs don’t force you to take required minimum distributions as long as you’re alive, which allows your money to keep growing tax-free in the account until you need it. Other retirement accounts require you to start taking distributions when you turn 70.5 even if you don’t want to. Regardless of which type of account you use, your contributions can qualify you for the retirement savings contribution credit.

4. Budget Using the Bucket Approach

Many financial advisors us the bucket approach, which involves budgeting by category — you categorize cash into buckets for different short- and longer-term needs. For shorter-term needs, like your living expenses and emergency fund, you put the money in very conservative vehicles, such as cash and money market accounts. You can invest more aggressively for your longer-term needs.

“The first [bucket] is short-term needs — assets you have designated for targeted short-term expenses and six to 12 months’ [worth] of safety money,” Drago said. “Generally this is money that has a one- to three-year timeline. The second bucket is three- to five-year, or mid-term money. These are generally in more conservative investments such as bonds and CDs. Also, the second bucket replenishes the first bucket as you deplete those assets for immediate needs.”

“The third bucket is your long-term planning money,” Drago said. “The goal is to grow the assets and use them in the future to generate income or replenish the other two buckets.”

Related: 42 Easy Ways to Save for Retirement

5. Relocate to a More Affordable Area

More than 25 million Americans who are 60 and over are economically insecure, living at or below 250 percent of the federal poverty level, which is $29,425 for a single person, according to the National Council on Aging. Almost half of American seniors might be just one accident or unexpected expense away from being unable to stay in their homes, according to Amanda Andere, CEO of Funders Together to End Homelessness.

Moving to a cheaper area or smaller space can cut costs significantly. For example, Birmingham, Ala., is the cheapest place to retire with annual cost of $33,219, according to a GOBankingRates study. Compared to Spokane, Wash., which came No. 50 on the list with an annual cost of $43,102, you can save almost $10,000 per year by living in Birmingham.

6. Pay Down Debt Sooner Rather Than Later

You’ll quickly outlive your retirement savings if you don’t aim to pay off any debt you have as soon as possible. When setting your goals, try to pay off big debts — like your mortgage — completely so you have better cash flow.

For example, paying down your mortgage ahead of schedule is a great way to reduce the amount of interest you pay each month. But until you pay off the mortgage, you still have the monthly payment detracting from your monthly cash flow.

7. Consider Longevity Insurance

Longevity insurance, sometimes called a qualified longevity annuity contract, is an insurance policy that protects you in the event you live for a long time. You pay a premium up front in exchange for getting a certain amount every month at some point in the future — and you receive payments until you die — which means you won’t outlive at least that portion of your income. The downside, of course, is that if you die before the payments begin, you won’t receive any of the benefits.

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If your retirement nest egg isn’t what you’d like it to be, you still have options for how you can make ends meet in your golden years. Employing one or more of the strategies listed here can help maximize the value of the money you have saved so you can enjoy your leisure time after you’ve finished working full-time.

Ruth SarrealPaul Sisolak and Jamie Young contributed to the reporting for this article.