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6 ways to make your retirement savings last

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By Ruth Sarreal/GOBankingRates

Planning for retirement these days can be daunting. Most 65-year-old baby boomers can expect to live to the age of 84.3 years if they're men and 86.6 years if they're women, according to the Social Security Administration. However, a Retirement Confidence Survey conducted in 2016 by the Employee Benefit Research Institute found that 54 percent of workers age 55 and older had less than $100,000 in average retirement savings, indicating that most workers who are retiring in the near future won't have enough retirement savings to last them through their lifetime.

Outliving one's retirement fund can be a disconcerting financial prospect for people who have spent decades building up a nest egg, and even more so for those who haven't saved, don't have a pension, and aren't positioned to live on their Social Security checks or current savings. Even if you're already retired or are approaching that goal, it's still possible to keep your finances ahead of you.

To help you with your retirement savings plan, consider these six ways to make sure you don't outlive your retirement savings.

This article was originally published by GOBankingRates.

1. Ease your way into retirement

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Instead of cutting off your career completely, keep working on a part-time or reduced basis even if you've reached retirement age -- and take retirement for a test drive. You'll see if retiring is something you're ready for, and you might even find an opportunity to try your hand at trades you previously didn't have the chance to pursue.

"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. and head of Citizens Investment Services. "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

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If you decide to keep working, consider putting off your Social Security benefits until you turn 70. Delaying them until this age can mean up to an 8-percent higher annual payout in the benefits owed to you. 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.

3. Switch retirement savings from a traditional IRA to a Roth IRA

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When you plan for retirement, it's a good idea to wait as long as you can before tapping into your tax-deferred accounts such as 401(k) accounts and individual retirement accounts -- they'll have more time to compound earnings before you withdraw them and you'll avoid penalties for early withdrawal.

To make those tax benefits go even further, you can convert your regular IRA to a Roth IRA; choosing the Roth means tax-free withdrawals, so it's OK to hold off on using these funds for retirement if you're worried about rising taxes. You can contribute up to $5,500 to your IRA in 2016. Then, it might also be possible to take the Retirement Savings Contributions Credit, or Saver's Credit, for some eligible IRA contributions.

4. Budget using the bucket approach

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The bucket approach is the strategy of budgeting by category. You can categorize cash into buckets for different short- and longer-term needs such as living expenses, emergencies and short-term goals. For daily expenses, keep funds readily on hand for groceries, bills, utilities and the like. You should also have an ample emergency fund for the unexpected and a health savings account for medical expenses -- giving you a good starting nest egg for your retirement savings account.

"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."

5. Relocate to a more affordable area

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More than 25 million Americans age 60 and over are economically insecure, living at or below 250 percent of the federal poverty level of $11,770 for a single elder, according to the National Council on Aging. Almost half of American seniors might be just one accident or unexpected expense away from poverty or being unable to stay in their homes, according to Amanda Andere, president and CEO of Wider Opportunities for Women.

WOW's analysis of Census Bureau data also revealed that seniors in some states are doing much better financially than those in other states. Moving to a cheaper area or smaller space can cut costs significantly. Use Zillow or Trulia to research places where you'd like to retire. Downsize to areas popular with seniors for better costs of living and climate. Sell your home, buy a new home in a cheaper area, and reinvest your earnings in an annuity, immediate annuity or other savings vehicle.

6. Pay down debt sooner rather than later

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You will quickly outlive your retirement savings if you don't aim to decrease or completely eliminate any debt you have -- especially the high-interest kind like that from credit cards, and auto loans, mortgage payments or children's student loans -- as soon as possible. If you decide to delay some of your investment or benefit payouts until 70, try to set an earlier debt-payoff goal.

"Paying down debt prior to retirement does a couple of things: It allows the final accumulation of assets to be accelerated and it allows a reduced need for income in retirement," said Drago. "Reducing debt is as good as creating income. Not having revolving payments means less income need."

When it comes to debt-payment strategy, there are two popular methods: the debt snowball and the debt avalanche. The strategy of a debt snowball advises paying off smaller debt first and "snowballing" to your larger expenses; a debt avalanche involves an opposite strategy in which you reduce high-interest debts first. Both methods are practical ways to clear your finances of any outstanding debts that could negatively impact your retirement funds.

How much should you save for retirement?

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The answer to this question is not easy, especially considering the average retirement savings by age varies. Retirees should have 70 to 90 percent of their pre-retirement income per year saved to live comfortably in retirement, according to many experts. But you should save and spend according to what your individual needs and goals are in retirement. Using a retirement savings calculator can always help. When you make a retirement plan, list out your financial priorities for the next few years, and configure these tips into your life for a happy and healthy retirement -- no matter how long it is.

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