8 Steps to Make Sure You Don't Go Broke in Retirement

This is simple: If you delay taking Social Security benefits by four years, you can increase your monthly paycheck by 32 percent. I tell people to think differently about the decision. If, say, a 66-year-old could get $2,000 a month if she elected to start Social Security payments now, I tell her to go ahead and spend that amount now from her portfolio. What she is really doing is buying a payment that could be $640 a month higher if she waits until age 70. And each year, your payment gets adjusted higher for inflation. Higher guaranteed inflation-adjusted income reduces the odds of running out of money. “Delaying SS is still a good idea even if you believe there will be reductions in the future,” Vernon says. Why? Because you still receive a percentage of a bigger number.

6. Be frugal, but focus on the big things.

I'm all for being frugal, and I love AARP's annual list of 99 ways to save. But focus on the big dollars. Buying a modest car and keeping it for a decade or longer are the single biggest way to save. Downsizing the house can save a bundle, too, Vernon told me, but moving to a different state is another matter, as your network of friends and family is a key to happiness and longevity. Getting insurance quotes every couple of years may not only save you significant cash but also make sure you are insuring just for what you can't afford to lose. Comparing prices is so much easier online. Before I buy products on the web, I Google the site and the words “promo code.” Often, a minute can save a few bucks. Consumer advocate Clark Howard regularly comes up with amazing deals.

7. Keep your investing fees low and your discipline high. 

When we buy things, we get feedback on how much we are spending from our bank and our loved ones. In investing, however, we have to do more work to get that feedback, such as looking up the fund fees through sites like Morningstar. Research demonstrates that lower fees typically yield greater returns, and that gives you more money to spend. There is always the possibility that when the next bear market strikes, you will panic and sell a low-cost fund; that's where having the discipline to stick to an asset allocation is critical. For instance, if you sold in March, when the stock market shed 35 percent, you were likely taking on too much risk.

8. Keep cash working hard.

Today many banks are paying 0.02 percent or less on your money. But some online savings accounts are paying 0.70 percent or more and are FDIC insured. That may not seem like much, but each $10,000 pays $70 annually, which can buy a few nice meals a year. Depositaccounts.com and Bankrate.com are two good places to shop.

Take these eight steps and you'll be far more likely to fund the rest of your life. Then you can concentrate on whatever brings you meaning and happiness.

Allan Roth is the founder of Wealth Logic, an hourly-based financial planning firm in Colorado Springs, Colorado. He has taught investing and finance at universities and written for Money magazine, the Wall Street Journal and other publications. His contributions aren't meant to convey specific investment advice.