Take Charge of Your Money at 70+

The Plan for What You Make (and Save)

1. Spark a sell-off

Entering retirement opens up a new universe of saving options, big and small. For example, selling your car — and ridding yourself of the insurance and maintenance charges that come with it — can be a great source of cash. Downsize your cache of belongings, if you haven't already: List that mid-century bedroom set or your comic book collection on eBay or Craigslist.

2. Get back to work

About 60 percent of people say they'll work in retirement, according to CareerBuilder. But the Bureau of Labor Statistics says that only 32 percent of men and 19 percent of women actually do. Career coach Nancy Collamer recommends targeting temporary positions.

"We are becoming a nation where work is handled on a freelance or temp basis," she says. "For older people who don't want a full-time job, there's a lot of opportunity." Sites like CoolWorks.com can help you find seasonal jobs in resorts and national parks.

"Think about how you want to spend your time," says Collamer, "then think about whether you can get paid to do it." You might earn $3,000 (and a trip to Europe), she says, to lead a coach bus tour. The International Guide Academy offers training at bepaidtotravel.com. Or be an inn sitter: "The reality of owning a bed-and-breakfast isn't as much fun as you think. As an inn sitter, you relieve the people who own the place and want to get away." Learn more at sites like inncaring.com and interiminnkeepers.net.

3. Make a policy decision

This sounds morbid, but if you're not in good health and have a life insurance policy that's difficult to maintain, you could sell the policy, sometimes for more than the cash value, says Stephen Rothschild of the LIFE Foundation. This is not a transaction to do yourself, Rothschild notes. Find a professional adviser through the Life Insurance Settlement Association (lisa.org). Nor is it something you should do without exploring other options, like borrowing against your policy or collecting accelerated death benefits, which you might do if you have less than 24 months to live.

The Plan for How You Invest

1. Find balance

Rebalance your assets at least once a year when you're in retirement, so that you have the appropriate amount in stocks, bonds and cash (as well as all of their subcategories) for your age and risk tolerance. Why? Because should the market take a major tumble, you have little time to make up what you've lost. If you are reading this and berating yourself for never rebalancing, it's time to punt. Put your money into a fund that will rebalance your account for you — a target date retirement fund.

2. Invent a pension

Converting 20 to 25 percent of your assets into an immediate annuity provides a fixed income stream for the rest of your life (and your spouse's, if you structure it that way), insuring yourself from the risk of outliving your money.

Your return is higher in your 70s than earlier, says financial planner Bill Losey, author of Retire in a Weekend, "because the older you are, the shorter your life expectancy, the higher your payout." Unless you purchase inflation coverage, it won't rise with inflation, and when you're gone, so's the principal. "Because today's low interest rates are currently not working in your favor, it makes sense to annuitize in chunks as you age," says Losey. "Then, you invest the remainder of your nest egg to provide the growth you need to keep up with inflation."

3. Look longer term

Got great genes and fear running out of money after age 85? You can hedge your bets with longevity insurance, a kind of deferred annuity that kicks in at an advanced age (typically 85). Then you'll start receiving monthly sums. Longevity policies are far cheaper than immediate annuities, and many retirement experts promote them as a defense against outliving your savings. But if you pass away early, the money's gone.

4. Work out the wills

If haven't already, talk to your kids or other heirs about your financial picture, says Maryland financial adviser Tim Maurer. "You have the opportunity to communicate your legacy, financial and personal, to your children. If you've had your head down, it's time to pick it up, while you have time." Every three years you should be going over your estate planning documents. A will, durable powers of attorney that allow others to make medical and financial decisions for you, and a living will should be in place.

The Plan for How You Spend

1. Watch spending creep

"The biggest problem I see with people their first three to five years in retirement is that they're spending more money than they thought they would," says planner Bill Losey. Suddenly, you have Monday through Friday free. You can go out for a real meal rather than eating lunch at your desk, hop on the train and go see the grandkids, play a round of golf. And the money vanishes. So track your spending, even if you never had to before. A lavish start to your retirement can mean there's not enough nest egg left to grow to carry you through to the end.

2. Call the mover

Downsizing to a smaller, less expensive home is "the most powerfully positive thing that someone can do to improve their retirement situation," says planner Tim Maurer. This doesn't have to mean relocating across the country. Trading a high-tax school district for one nearby with lower taxes can make a substantial difference. If you're willing to go a few hours away — say from San Francisco, where the cost-of-living index is a sky-high 199, to Carson City, Nev., where that index is a below-average 99 — you can revolutionize your standard of living.

3. Reimagine your life insurance

Maybe you first bought life insurance when you had a baby. Now that baby has a baby of her own. Do you still need the coverage? If you are healthy and your obligations are behind you — if your spouse could live on the money in the retirement accounts plus Social Security if you died and the kids are on their own — drop it. If you do need to continue it, act now to extend your current policy, says the LIFE Foundation's Stephen Rothschild. The younger and healthier you are when you buy new coverage, the cheaper it's going to be.

4. Don't help your kids too much

Almost 25 percent of Americans 50 and up use credit cards to help other family members, an AARP/Demos survey says. Building debt so that your kids don't have to isn't wise. If they're struggling, refer them to a credit counselor at debtadvice.org. Both parents and grown kids are more comfortable talking to an adviser about money than to each other, according to a Fidelity study. Find one through the Financial Planning Association (FPAnet.org) or the National Association of Personal Financial Advisors (NAPFA.org).