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If you want to have a cozy retirement, your best bet is to find a job that offers a traditional pension. Have you heard of pensions? They’re a near-mythical job perk in which your company continues to pay you monthly even after you retire and until the day you die.

Pensions are a sweet deal for workers. But, while they used to be the norm, only 7% of employers offered traditional pensions to their new hires in 2013. That means you need to find other ways to ensure you’ll have enough money to retire.

1. Wait Until Age 70 to Begin Social Security Payments

If you want to maximize your retirement money, you’ll want to hold off on collecting your Social Security until age 70.

You see, even though you can receive full benefits somewhere between age 66 and 67 (depending on when you were born), the government gives you a little bump in benefits for each year you wait. According to the Social Security Administration, those of you with a full retirement age of 66 or higher can get a 32% increase in your monthly payment by waiting until age 70 to begin benefits. After age 70, the increases stop, so there is no benefit to waiting longer than that.

Of course, this strategy may not work for everyone, as Stacy Johnson points out in this article. You need to consider your life expectancy, health and family history. If none of your relatives seem to make it much past age 70, then you may be better off claiming benefits before that.

2. Maximize Your Spousal Benefits

Married couples also have access to other Social Security strategies that can maximize their overall benefits.

For example, one spouse could file for Social Security benefits and then immediately suspend payments. Doing so opens the door for their husband or wife to claim spousal benefits, as long as that person is 62 or older. The couple can use the spousal benefits to supplement their income until age 70, at which time the suspended claim can be activated and benefits will begin at the bonus rate as outlined in the strategy above.

3. Base Your Fixed Expenses on Your Social Security Benefits

Regardless of whether you file early or file late, let your Social Security benefits dictate your lifestyle.

Hopefully, you have plenty of cash in your retirement fund, but there can be risk involved if that money is invested in stocks and mutual funds. Your returns can fluctuate and, heaven forbid, the market could crash, taking your fund balance with it.

On the other hand, Social Security is the old reliable of retirement money. Yes, there are concerns about its long-term solvency, but it has a strong history of delivering benefit payments month after month, even during government shutdowns.

Since Social Security could be your most reliable source of income in retirement, we recommend you make sure all your fixed and essential expenses can be paid out of that monthly amount. That means your combined housing, transportation, utilities, food and insurance costs should be no more than your Social Security check.

The average monthly benefit this year is $1,294, so you might be thinking there is no way you can pay all your fixed expenses with Social Security. However, if you have no debt, no mortgage and a paid-off car, it should be doable.

4. Leave the Principal Amount of Your Retirement Fund Alone

Then, when it comes to your fun money in retirement, only use the interest or returns generated by your investments and savings. Don’t touch the principal amount — that is, the balance that is in the fund when you first retire.

The principal needs to be untouchable because if you start blowing through it, you could end up with more retirement years than cash. Make your money last by limiting your discretionary spending to whatever gains you’re making off that money.

For the sake of simple math, let’s assume your money is earning a 10% return. That means if you have a principal balance of $200,000, you get $20,000 to spend for the year. Did you start saving late and have only $20,000 in your retirement fund? Then you get a mere $2,000 to spend as you wish.

That second number doesn’t sound like much fun, right? All the more reason to start saving for retirement now. Of course, you only get that $2,000 (or $20,000) if your money earns a 10% return. That brings us to the next point.

5. Be Smart, Yet Safe, About Your Investments

Ten percent is, in my opinion, a doable rate of return for moderate or aggressive investment portfolios. However, in exchange for a double-digit rate of return, that portfolio comes with more risk, more chance you could lose some (or a lot) of your money. That’s a risk you may not want to take in your 50s or 60s.

A typical strategy for those nearing or at retirement age is to move their money into what are called stable value funds. These funds aren’t so much interested in making you money as they are in making sure you don’t lose any money. As a result, returns may be as low as only 1%.

One percent doesn’t get you much fun money. On a $200,000 retirement fund, that gives you only $2,000 growth for the year.

The quandary for older investors and retirees is to find a balance of funds and investment options that provides growth while keeping some money safe from market drops. That balance may include a mix of savings, money market funds and mutual funds. Rental real estate is another option that can serve as an investment while doubling as a source of income.

There is no one-size-fits-all solution, so consulting with a financial professional may be a wise move. A fee-based pro can evaluate your resources and goals as well as market trends to recommend an investment strategy that will allow your money to grow without opening up your entire balance to a loss in the event of a recession.

6. Start Planning Now

Finally, one of the best ways to ensure you’ll have enough money in retirement is to start planning now. Doesn’t matter if you’re 20 or 60; there’s no time like the present.

Planning for retirement is about more than counting dollars; it’s also about visualizing the life you want to lead. To plan properly, you need to have a good idea where you’d like to live and what activities you want to do. You’ll also want to calculate your life expectancy and your expected Social Security benefits as part of the planning process.

Retirement planning can seem overwhelming, but don’t let that stop you from diving in. It’s better to start putting away a little money each month, even if you’re not sure it’s enough, than to do nothing.

This post originally appeared on Money Talks News.

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  • miamisid

    Item number 1 is very good advice: take social security early and guarantee a low monthly income along with blowing through your personal savings or wait for the highest guaranteed monthly income. Guess which the Boomers will choose.

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