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Making your
life savings last for 20 to 30 years is a challenge all retirees face. Did you
know that, initially, many newly retired people spend more money than they did
while working? Leaving the workplace frees up time to travel and to pursue new
activities and hobbies. All of that costs money. But, sooner or later, reality
sets in, leaving folks to wonder, How long will I live? Will I have enough money
to support myself? A combination of setting priorities, spending less than you
bring in, and planning for unexpected expenses can increase the longevity of
your savings.

Here are six things you can do to make that money last:

1. Spend taxable accounts first.
   That means spend down
   your accounts that generate a taxable income on its earnings. This earned
   investment income is known as 1099 income. Spending down the taxable money
   lowers the interest income that you receive, which then lowers the amount owed
   to the IRS at the end of the year. Then, you can allow your tax-advantaged, or
   sheltered, accounts – such as 401k’s, IRAs, CDs, and Annuities – to continue to
   grow. The earnings on these accounts is tax-free. However, by law, you can’t
   hold onto these accounts forever. Your tax-advantaged accounts have withdrawal
   rules, so talk to your financial advisor about when you should begin to take
   your required distribution and how much it will be.
2. Downsize your residence.
   Your home is most likely your
   biggest retirement expense. You could stay in your existing home and take in
   renters, move to a smaller house, or relocate to an area with lower housing
   costs. But if you’re going to relocate, do your research first. Check property
   and state income tax rates before moving to an unfamiliar state.
3. Reduce transportation costs.
   You can save a great deal
   in gas, insurance, and taxes by becoming a one-car household. If you choose to
   move to a downtown area, give up your vehicle and rely on walking or using
   public transportation.
4. Travel wisely.
   As a retiree, you can probably be fairly
   flexible with your plans. Avoiding peak travel times will save you in airfare
   and lodging fees. Look for last-minute deals in newspapers or on airlines’ Web
   sites (some sites call them “e-fares” or “weekend getaways”). Travel with a
   group of seniors, so you can share costs.
5. Shop and compare.
   You can use the Internet to compare
   prices on almost anything you’re planning on buying. Look for discounts or
   coupons, in newspapers and online. Search for sales. Buy food in bulk when
   possible and eat out less often. If you do enjoy eating out, seek out those
   early-bird specials.
6. Look for free or low-cost activities.
   Take advantage
   of senior discounts at restaurants, movies, and museums. Contact your local
   senior center to see what kinds of activities they offer. Check the local
   newspaper or your city’s tourism Web site to find free concerts and events. In
   the summers, food and crafts festivals abound, often with free entertainment and
   free admission.