One of the most terrifying prospects that many workers face today is the possibility of outliving their retirement savings after they stop working. In many instances, however, this worst-case scenario can be avoided with proper planning. There are several steps you can take to ensure that your money lasts as long as possible:

Plan a Realistic Budget

If you thought your retirement would consist of pleasure cruises, country clubs and indulging in expensive hobbies, you'd better make sure those things won't deplete your savings. A realistic assessment of your monthly bills compared to the guaranteed long-term income you will receive, such as Social Security and a company pension should be done before you retire so that you have a clear idea of how your necessary living expenses stack up against your monthly income.

Tax Planning
If you have both Roth IRA and taxable retirement accounts, you may be wise to take any regular stream of income that you need from the taxable accounts. If you decide to withdraw $500-$1,000 per month from a taxable account, this won't likely have a substantial impact on the amount of income tax that you have to pay. You can then allow your Roth accounts to continue growing and use them to take out occasional larger distributions, such as to pay off your mortgage. This way, you won't ratchet yourself up into a higher tax bracket and pay additional tax on all of your income for the year.

Asset Allocation
You need to pay as much attention to your offense as your defense. If all of your retirement savings are allocated into guaranteed investments such as treasury securities and CDs, you may need to consider the possibility that you will run out of income at some point. There are several possible solutions to this dilemma; the right one will depend upon your particular investment objectives and risk tolerance. If you are truly afraid that you might outlast your assets, you may want to consider purchasing an annuity that offers a guaranteed lifetime income rider that promises to pay you every month regardless of how long you live. Longevity insurance may be another alternative if your family has a history of living to a ripe old age.

If you are willing to absorb some volatility, then you may want to consider moving a portion of your assets into a carefully-selected mix of equities, such as blue-chip stocks or mutual funds. You can also increase the level of income from your investments by looking at corporate bonds, preferred stocks and ETFs that invest in income-producing securities. Even a moderate level of risk can materially increase your investment returns over time. You should try to dip into your principal as little as possible, however, at least for the first few years. If you have to use some of your principal to live on, then you should do a thorough analysis of how long your money will last at a certain rate of withdrawal, assuming a realistic rate of growth.

Debt Retirement
Your money will go much further in retirement if you can retire your debt before you retire yourself. Not having to make a mortgage or car payment is mathematically equivalent to the income generated from a six-figure portfolio in many cases. If you do not have the means to wipe out your debt before you stop working, then refinancing should be your next goal if this is attainable. This is perhaps one of the least-risky methods of improving your cash flow after you retire.

Long-Term Care Insurance
This is one key factor that truly has the potential to wipe out your savings portfolio if you have no insurance coverage. The cost of long-term care has continued to spiral over the years and this trend is not likely to change anytime soon. According to a survey by MetLife, the average cost of a private room nursing home was $239 a day or $87,235 a year in 2011. Of course, the premiums for long-term care insurance aren't cheap either, so you will need to evaluate the risk versus cost here.

The Bottom Line
These are just some of the things that you can do to make sure that your nest egg lasts at least as long as you do. For more information on making your retirement savings last, consult your financial advisor.

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