Live for Today, Save for Tomorrow

It's crazy not to save during your 60s. What if the market collapses? What if you get sick? What if you lose your job?

Working longer gives you the chance for some immediate gratification in your 60s, but it's not a free ticket to fiscal irresponsibility. Don't stop contributing to your 401(k) if your employer provides a match, for example; instead, dial back your contributions but keep saving enough to qualify for the maximum match. Otherwise you're essentially passing up free money. Don't drag debt into retirement. If you carry credit card balances, pay them off before you get into practice retirement's live-it-up mode. (Then keep them paid off.) Fahlund also recommends making big-ticket purchases while you have the income to cover them. And stay alert to market headwinds. If T. Rowe Price's 7 percent preretirement and 6 percent postretirement return assumptions look dicey after a few years, you may have to adjust by diverting more of your income into savings again, or trimming your expenses, or even delaying retirement by a year or more.

Can you really count on keeping your current job all the way to 70? Even if your employer is willing, your health may have other ideas. If you think that you're hale enough to go the distance, and secure in your position, practice retirement could be a possibility. "You have to take a look at your current job circumstances and ask yourself what is the likelihood you will be with that employer at age 67," Sass says. "If you do change jobs, you will probably lose money."

But don't forget that you can safely earn less than you once did. Since you are no longer diverting 10 or 15 percent of your salary into savings, you can bring home 10 or 15 percent less and still maintain the same quality of life. The aim is simply to resist tapping your savings and Social Security benefits until you are deep in your 60s.

Which brings us to the true benefit of working to a later age: options. One option is to have fun and spend more in a practice retirement. Another is to earn less money and take your foot off the career gas — or do work that's more meaningful to you. As long as you're still earning your living, the choice is yours. And with a Plan B like that, who really misses Plan A?

Next: 5 keys to working past 60. >>