11 ways to save after retirement

In an ideal world, the onset of retirement would be greeted with relief: Finally, you can leave the rat race for good and spend time doing what you really want. But for many Americans rapidly closing in on their golden years, retirement is a source of stress. Many see retirement as an approaching deadline, beyond which, if they haven't saved a vast mountain of cash, they'll just have to do without. Catfood anyone?

It doesn't have to be this way.

Careful planning, money management and saving will go a long way toward making your retirement years relaxing -- not taxing. Here are some tips for making the most of your money after retirement:

1. Draft a financial plan. "The great fear is running out of money," says Chris Farrell, host of the nationally syndicated radio show "Marketplace Money" and author of the financial advice blog "My Two Cents." "That's the paralyzing fear every retiree has."

Creating a financial game plan will help you manage your fears, as well as your money.

Determine where your money will be coming from -- investments, pensions, Social Security or savings.

"You want to keep your money in [tax] deferred vehicles as long as possible," says Wayne G. Bogosian, co-author of "The Complete Idiot's Guide to 401(k) Plans."

"Tap the ones that aren't -- like Social Security, traditional pensions and personal savings."

Figure out what you need coming in each year to live the way you'd like, and allocate your money accordingly. Typical strategies are to keep a certain percentage of your savings in cash or CDs (liquid), a certain amount in bonds (mid-term payoff) and the rest in stocks (long-term investments).

Set a budget. "Look at what you want to do" Farrell says. "In the early years of retirement, be a little on the cautious side, but don't deny yourself."

Review your finances, at least annually. "See where you are and what you want to do," Farrell says. "Spend in such a way that you are enjoying your life."

Keep a little something tucked away, "but you never come back, so you might as well enjoy it."

When it comes to retirement savings accounts -- IRAs and 401(k)s -- taking out 4 percent a year is a standard yardstick.

"If you only spend 4 percent of what you've got, it's virtually impossible to run out," says Clark Howard, host of a nationally-syndicated consumer radio show and co-author of "Get Clark Smart: The Ultimate Guide for the Savvy Consumer."

Of course, some people disagree with the 4 percent spend-down rate theory.

But be flexible enough to look at your special circumstances and goals. Remember, if you deplete your investments early on -- even if you work part-time and continue investing -- it will be tougher to make up the difference. Best bet: Sit down with a financial planner who specializes in retirement distribution analysis.

Make sure your expert makes money only from offering advice -- not from commissions on products sold to you or through transaction fees every time something is bought or sold.

2. Rent before you buy. Looking to try out a new lifestyle in a new community, or live out of an RV? Try it before you buy it.

"Sure you enjoyed your vacation in the RV, but do you really want to live in it?" says Farrell.

Instead, negotiate to try it out for six months, and see how it wears on you. "You're not sinking your hard-earned savings into a new lifestyle," says Farrell. "You're leaving your options open."

3. Eliminate extra fees and charges. This is a good time to slowly look over the fine print on your finances. Is your bank charging outrageous service fees? Shop other banks or credit unions that are willing to offer you the same options for free.

4. Work part-time. If you enjoy your job, or the job you're considering, this is a great move. Any money you're earning isn't coming out of your 401(k), which means you're actually saving cash for later. But run the numbers before you go back to work. And if you don't do your own taxes every year -- this might be a good time to hire a pro to tally it up for you, according to Farrell.

Determine the best time to start collecting Social Security. If you start collecting it between 62 and your "year of normal retirement" -- a benchmark set by the Social Security Administration that varies with your birth year -- watch your income. If your job paid you more than $12,480 in 2006, you could lose a sizable chunk of your Social Security benefits (one dollar for every $2 you bring in over $12,480). For 2007, the amount increases to $12,960. Either keep your earnings below that threshold or defer Social Security until later in retirement, when you cut back on your earned income.

And don't forget to weigh the intangibles. If work is drudgery, that's one thing, but if you crave interaction with other people and want to keep your professional skills sharp, it may be worth a little extra in taxes.

5. Claim that senior discount. "Use every discount you can, including that AARP membership," Farrell says.

He has one family friend who took this technique a step further -- much to his financial benefit. Newly retired, the man went to the independent businesses he'd patronized for decades, announced he was now retired and asked the owners what kind of a discount deal they could offer.

"It's no different than the deals he [negotiated] for years in his working life," Farrell says.

Too often, he adds, retirees don't look at it that way. They need to realize that they are a very valuable commodity, especially for independent businesses. They tend to be extremely loyal, have disposable income and visit frequently. In return for regular patronage, some gas stations, diners, dry cleaners and the like are willing to offer them perks to keep their business, according to Farrell.