3 Ways to Make Your Retirement Savings Last

One of retirees' biggest fears is running out of money at some point in time. And that's understandable.

Whether you're retiring with $500,000 to your name or $5 million, it's natural to want to make your savings last as long as possible. Here's how.

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1. Keep your money invested strategically

A lot of people tend to shift into stable investments like bonds once they retire to minimize portfolio risk. In doing so, you could end up stunting your portfolio's growth during retirement, forcing yourself to raid your principal to a larger degree.

Imagine you invest so conservatively that your portfolio only generates a 2.5% to 3% return annually. To get the income you need out of your savings, you may need to pull a substantial amount from principal.

On the other hand, if your portfolio contains a mix of conservative assets like bonds and stronger income-producers like dividend stocks and high-yield ETFs, it might manage to generate a 5% return or higher. In that case, depending on your spending needs, you may be able to get the income you need without having to touch your principal, or by barely touching it.

2. Adjust your spending during market downturns

Tapping your portfolio when the market is down locks in losses. If you want your savings to last, it's best to leave your portfolio alone as much as possible when it loses value.

That's why it pays to be flexible with your retirement spending. Build in some wiggle room in your budget and be willing to reduce discretionary expenses when the market isn't being kind to your IRA or 401(k). Or, be willing to work part-time to maintain your spending without having to raid your savings too heavily.

3. Put off your Social Security claim

The more money you're able to get out of Social Security every month, the less you should have to dip into your portfolio. You're entitled to your complete monthly benefit without a reduction at full retirement age, which is 67 if you were born in 1960 or later. But for each year you delay your claim beyond that point, until you turn 70, your benefits get an 8% boost.

If delaying Social Security until 70 isn't feasible, don't go to that extreme. Hold off for a year past full retirement age, or 18 months. A smaller boost is more helpful than no boost at all.

It's natural to worry about your savings lasting as long as you need them to. But if you invest wisely, remain flexible in terms of your spending needs, and claim Social Security strategically, you may find that you're able to live comfortably without the constant fear of running out of money.

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