How Not to Outlive Your Savings:
- Get a fiscal check-up and some financial guidance as you start to save for retirement.
- Set a budget so that you don't overspend during retirement. Many financial advisers urge you to limit withdrawals in the first year to 4 percent.
- Practice living on your projected retirement funds before you actually retire.
- Decide in advance the age at which you will retire. "This is important because many people assume they'll retire at 65," Mary Beth says. "If you're a baby boomer, you won't get your full retirement benefits, meaning Social Security, at that age. So if you're looking for full benefits, you need to wait until you've reached full retirement age—it may be 66." If you take your benefits early, say, at 62, you could get 25 percent less money, she says. If you wait until you're 70, the benefit amount increases by 8 percent each year—a marked difference.
- Consider an annuity, which can guarantee income for the rest of your life. Be sure to deal with a reputable company.
- Roll over your 401(k) money into an Individual Retirement Account when switching jobs or retiring.