15 Expert Tips for Stretching Your Retirement Savings Further

Saving for retirement can be complicated. You must ensure you're setting aside enough for your later years and determine how to invest money so your nest egg grows large enough to support you.  

Fortunately, there are some proven techniques you can follow to ensure you have enough money — and to make your retirement savings go further for a stress-free retirement. 

Here are 15 steps you could put into practice now and in the future.

The longer you live, the greater your chances of running out of savings, especially if you follow outdated rules built around a shorter retirement. 

For example, experts used to advise you to save 10% of your annual income, but that might not be enough money anymore if you need to plan for more years of retirement than people did in the past.

When deciding how much to invest in your future, be sure to make a realistic plan for your money to support you for a long time. It might be smarter to end up with money left that you could pass on to heirs or charities than to find yourself without funds while you're still alive and need income.

Sometimes, the stock market won't perform as you hope, and you'll find yourself needing income for retirement during a market downturn. 

You might not want to sell losing stocks at a bad time, so make sure you have money accessible that you can live off of while you wait for the market to recover rather than having to sell and lock in losses.

It's a good idea to have enough money to cover at least six months' living expenses in your best savings account. That way, your money will still earn you the maximum possible return while protecting you from outsized stock losses.

Inflation reduces the buying power of your money over time. In other words, $10 today won't buy you $10 worth of goods in a decade; it'll buy you less. This could be a problem when you're on a fixed income, as most retirees are.

You need to understand how inflation will affect your buying power as you get older. For example, you might look ahead and see you'll have $500,000 saved in 30 years and might feel like that's enough because it's a big pot of money. 

But with the effects of inflation, a $500,000 investment account balance in 30 years will likely only have the buying power of about $200,000 in today's dollars.

Using the best cashback credit cards and cashback apps could help your money go further as a retiree because you'll get rewarded for spending you do anyway. 

If you can get some money back on every purchase, you'll effectively reduce the cost of all your spending. Be sure not to carry a balance on any credit cards that charge interest, as doing so will nullify any rewards you earn.

Chances are good, you'll build your retirement accounts by investing your money. And that's a good thing because earning a reasonable return on investment is helpful for saving enough for retirement. 

The problem, though, is that investing is inherently risky and you always stand a chance of losing money when you do it. Diversification could help reduce your risk. 

If you invest your money in a bunch of different assets, the chance of big losses could be reduced because at least some of your investments will probably perform better than others.

You could easily diversify your portfolio by investing in index funds that give you a small stake in many different companies sold on the U.S. stock market.

A side hustle could help you during your career and after retirement. By working a side gig when you're younger, you could invest the extra money you earn for retirement.

And when you start a side hustle in retirement, you could also bring in some extra income — and perhaps even have fun while doing it. The more you earn from your side job, the less you'll need to rely on your savings to support you.

It's important to diversify into different kinds of investments, but it's also essential to have the right mix of investments given your current risk tolerance. Your risk tolerance will change over time as you age and approach retirement.

That means you need to change what you're invested in over time, which likely means moving some of your money from stocks to bonds. If you invest in a target-date fund, this shift will happen automatically. But if you don't, you'll need to manually make adjustments.

Unless you're invested in a target-date fund, you might also need to change your investments over time if some of them perform better than others. 

Say you have $1,000 and want 80% of your portfolio invested in stocks, so you spend $800 on an index fund that tracks the stock market and $200 on a fund that gives you exposure to bonds.

Now, say your stocks perform well over time and grow more than your bonds, so you end up with $1,500 in stocks and $300 in bonds. You now have 83% of your portfolio in stocks, so you might want to sell some and buy more bonds to get back to your desired 80% split. 

In this case, you'd need to rebalance your portfolio to correct your asset allocation.

Reducing your spending while you're working could help you save more for retirement. And living on a tighter budget as a retiree means you won't need as much saved. The good news is, budgeting apps could make the process of living on a budget easier.

It's best not to wait until retirement to try to reduce your spending because that could mean a major and sudden lifestyle change that's hard to sustain. Get used to budgeting now so you will be ready to live on less as a retiree.

As you get older, you'll almost inevitably spend more money on health care. And Medicare won't pay for everything, as there are out-of-pocket costs even with this government insurance plan.

Investing in a health savings account (HSA) could help you cover these costs. An HSA lets you invest with pre-tax money. You won't pay taxes as your money grows, and you can carry it over from year to year (unlike with a flexible spending account in which the money has to be spent each year, or you risk losing some of it). 

If you withdraw money from an HSA for health care expenses, you won't be taxed on it either.

Not everyone can use an HSA. You must be enrolled in a qualifying high-deductible health plan to do so. But if you're eligible, you could put money into it to save for your future care.

If you retire with a mortgage or a lot of other debt, you'll have to spend your savings to pay your creditors. That includes paying interest charges with your savings. 

All this could reduce your account balance more quickly than it should, putting you at greater risk of running out of money as a retiree.

If you have no mortgage debt, you should be able to live inexpensively and won't have to worry about how to pay for housing every month. If current rates are lower than your mortgage, you might consider refinancing your mortgage to have a better shot at paying off that debt.

When you're determining how much to save for retirement, it can feel overwhelming. But retirement savings goals could feel more attainable if you plan to work well into your 60s or even your 70s because you won't have to save as much money as quickly.

Unfortunately, you might not be able to remain on the job that long. Unemployment tends to be higher among older people, and sometimes, health issues make giving up your job necessary earlier than planned. 

If you want your retirement money to last, you should plan as if you'll need it in your early 60s to make sure you have enough.

You have lots of options for getting money out of your retirement accounts. If you have a 401(k), you may be allowed to take a loan out of your own retirement money and pay yourself back with interest. 

You could also take an early withdrawal from a 401(k), individual retirement account (IRA), or another retirement account. That's a withdrawal made before 59 1/2. Early withdrawals typically come with a 10% penalty, though.

If you take advantage of any of these opportunities, you could end up with much less money saved. That's true even if you take a loan because you reduce the return on investment you could earn during the time your money is out of the market. 

And there's a big risk that if you take out a loan, you won't pay it back. If you can avoid borrowing from your retirement money or taking early withdrawals, you should definitely do so.

An annuity is a type of investment you buy from an insurance company. Usually, you make either a lump-sum payment or a series of payments to buy one. 

When you've purchased an annuity, the insurer agrees to pay you a set amount of money either immediately or sometime in the future.

Annuities could provide guaranteed income for life if you choose that option. You won't have to worry about how your investments perform in the stock market if you buy an annuity, and you could make sure your money doesn't run out. 

But you might get a lower return on investment than you would if you were invested in stocks.

Even if you have a lot of money saved for retirement, taking too much of it out of your accounts could be a big risk. 

That's because if you withdraw a lot of cash, you won't have as much invested to keep earning returns that allow you to maintain your account balance.

There's a rule called the 4% rule, which experts have devised to help ensure you don't withdraw too much. 

Basically, it allows you to take 4% of your balance out of your retirement account in the first year you retire. Then you adjust your withdrawals upward annually to keep pace with inflation. 

However, because people are living longer, you might want to make your withdrawal percentage just a little smaller to ensure you don't run short of cash.

Someone turning 65 today has about a 70% chance of needing long-term care. Insurance doesn't usually pay for this, and it can be very expensive. 

However, you could buy insurance to cover the costs of nursing home care or in-home care so you won't have to drain your investment accounts.

It could be cheaper to buy long-term care insurance when you're relatively young rather than wait until really late in life. Be sure to shop around and read policy terms carefully, though, as some policies are better than others.

Being prepared for retirement could save you from a lot of financial stress after you stop working. If you're saving for retirement, make sure you're putting time into learning how to invest money. 

Consider taking some of these 15 steps today and as you age, so you can make sure your retirement nest egg lasts for the rest of your life.