Skeels says you can buffer the negative tax consequences of 401(k) accounts by balancing them with tax-free investments like Roth IRA accounts.
With Roths, you pay taxes on the front end and withdraw your money and any gains tax-free -- an advantage if taxes go up in the future as many experts predict. And in 2009, if you're 50 or older, you can invest $6,000 (instead of $5,000 for the younger cohort) in either a traditional or a Roth IRA -- or a combination of the two, as long as total contributions don't exceed the $6,000 limit.
Put off collecting Social SecuritySocial Security benefits are based on your lifetime earnings, using a formula that factors in the 35 years in which you earned the most money.
If you're making a good salary and can keep working longer, it would likely be to your advantage to wait before collecting benefits because higher lifetime earnings may result in higher benefits when you retire. Also, the longer you wait to collect, the larger the payout.
You can start receiving Social Security benefits as young as age 62. Or you could wait until full retirement age, which depending on your year of birth, ranges from age 65 to 67. If you give in to immediate gratification and start collecting at age 62, your benefits will be reduced by 20 to 30 percent than if you wait until full retirement age, depending on your year of birth.
If you wait until age 70, your check could be nearly twice what it would be at age 62. But since you won't be getting a bigger check after age 70, it doesn't pay to delay beyond then. Social Security's Web site offers a plethora of calculators, including a quick calculator that enables you to do a five-minute analysis.
Social Security rules can be confusing so you may have to visit a regional office for specific advice.
"In order to really understand how to maximize Social Security you have to go to them," Jason says.
"Do a little work online upfront first to get a feel for what the answer is and then make an appointment and go in."
Downsize in retirementDownsizing in retirement is no longer for folks on the fringes. It's becoming the new chic.
Seventy percent of people aged 50 to 59 who intend to move for retirement will do so because they are looking for more affordable housing, according to a 2005 Harris Interactive study on baby boomers.
"I've had people come in to consult with me and it turns out that their home is really too expensive to maintain throughout retirement. But they have emotional attachments, so they've got to make choices on what's more important," Skeels says.
If parting with the family home brings too much sorrow, there are other ways to downsize in retirement, including cutting spending, taking cheaper vacations and investing in fuel-efficient cars.
Again, downsizing effectively requires having a good grasp of your income and spending needs.
You may not have to downsize if you have enough saved to carry you through retirement. But if you don't, you'll need to make some adjustments.
"Let's say $50,000 is all you've got and you need to live on $10,000 per year. You know you've got a problem," Jason says. "You know you have to either lower your expenses or you have to increase the retirement fund."
Strive for good healthBy eating healthy and exercising, you can cut down on out-of-pocket medical expenses substantially.
Retired elderly couples will need about $250,000 in savings to pay for basic medical care over the rest of their lifetimes, according to the National Coalition on Health Care.
For the 77 million baby boomers expected to retire over the next few years, that's an enormous amount of money to have to set aside just for that purpose, especially given the lackluster returns on 401(k)-type investments lately.
The good news is that many of the most common conditions, including cardiovascular disease, diabetes and orthopedic ailments, are often preventable or manageable with proper diet and exercise.
In the end, a gym membership may provide a much greater return on your investment if it keeps you healthy and out of the hospital.