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Boomers retiring not so rich

Still, reverse mortgages can be an excellent source of extra cash, says Richard Bergen, a certified financial planner and accountant in Garden City, N.Y.

"Certainly, for retirees who may not have saved as much as they would have liked, their home can become a valuable source of retirement income," he says.

Maximize investments
In the quest to outlive your nest egg, you'll also need to consider tax efficiency.

When making withdrawals from your retirement fund, for example, Neiser suggests tapping taxable accounts first -- such as personal investment accounts -- since the taxes have already been paid on those earnings. Next, move on to tax-free assets, such as municipal bonds.

If you can hold out, NEFE recommends waiting until age 70½ to touch your tax-deferred accounts, such as 401(k) plans and traditional IRAs. That's the age when minimum withdrawals must be made from most retirement accounts. Waiting longer maximizes the benefit of compounded interest.

Retirees, especially those who undersaved, should also resist the urge to begin collecting Social Security early, says Neiser.

"You can make that check larger if you wait a bit beyond the first time you're eligible," he says. "That's one of the more basic strategies for bridging (a retirement fund shortfall). You want to try to maximize that check as best you can by using other funds first. That's an investment decision that will pay off year after year."

Finally, Neiser says, retirees should deplete Roth IRAs last, since they have no minimum withdrawal age and earnings grow tax free.

Though conventional wisdom holds that retirees should reduce portfolio risk by keeping equity exposure down and bulking up on bonds, Bergen says investors who undersaved may have to assume a slightly higher level of risk. Just keeping up with inflation, he notes, is not good enough.

"If you find that you have to draw down more than the recommended 4 percent or 5 percent of your investment principal each year, you may have to stretch for yield," Bergen says. "That means considering Real Estate Investment Trusts, or REITS, high-yield bonds and preferred stock."

When it comes to retirement planning, we all have good intentions. Unfortunately, we don't all save like we should. If you're among the millions who are ready to call it quits regardless of your nest egg's size, there are dozens of strategies you can employ to make your money last. Through part-time work, a strict spending diet and a well-timed withdrawal strategy, you can still pull off a comfortable, worry-free retirement.

"This is becoming more and more of an issue for my clients," says Bergen. "But if you can accept that you'll probably have to do some kind of part-time work, you can still work within the time frame of your original retirement date."

-- Posted: Nov. 1, 2006
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