Above all, don’t make the mistake of relying on the outdated rule of thumb, which suggests you’ll only need 70 percent of your pre-retirement income for every year you spend in retirement.
That’s a recipe for disaster, says Birkofer.
"That might have been true when Dad worked, Mom took care of the house and dad retired and hung around the house," he says. "But what we have now is a generation of dual income households and they’re going to have fun and spend money for the first 10 years of retirement."
Your expenses will decrease over the next few years as you stick closer to home and scale back your spending, but higher medical expenses later in life more than make up for it.
Once retired, the single biggest factor in making your nest egg last is the amount of money you withdraw from your portfolio every year.
"People believe they can spend far more of their assets than they can actually afford," says Salisbury.
For a 90 percent chance of outliving your savings, he says, keep your withdrawals to no more than 3 or 4 percent a year.
The idea, of course, is to leave your principal largely untouched, spending only the interest earned, plus a little extra to account for inflation.
Invest For Growth
Resist the urge, too, to overweight your portfolio with low-risk bonds during retirement; if your investments fail to keep up with inflation you're losing purchasing power.
Most investors require a significantly better average annual return than fixed income securities provide, given rising life expectancy rates.
Birkofer says retirees should maintain an asset allocation of 70 percent equities and 30 percent high-quality bonds. "The probability of running out of money goes up with every extra dollar you have in fixed income," he says, adding he favors dividend-paying stocks for their stable income.
Getting By On Less
If you’re already a day late and a dollar short, you can always reduce living expenses— sell your second car, move to a cheaper house or cook more meals at home.
And then, of course, there’s the last line of defense—employment.
If you had planned to retire in the next few years, but now suspect you won’t have enough to live on, postpone your retirement.
"Every additional year of work has a huge savings effect because you’re waiting that much longer to start spending your retirement money, plus you’re adding to your fund with whatever additional money you’re able to save," says Salisbury.
If you’ve already bid farewell to your boss, part-time jobs abound and some provide health care benefits, which means you’ll have extra income and lower expenses.
"That’s the sensible thing to do and it’ll also serve to increase your Social Security benefits—even if you already started collecting," says Salisbury.