Six Things to Help Your Plan for Retirement

55 meter sprinters, 85 and over age bracket. 2008 USA Master's Indoor Track & Field Championship in Boston, Massachusetts. March, 2008.,x-default
Photos: Striking Images from Senior Athletic Competitions Angela Jimenez / Getty Images

By the end of 2010 roughly 2.3 million people are expected to retire, according to the Social Security Administration. But on the heels of one of the country's worst economic crises, this group of future retirees is facing far grimmer golden years. Instead of looking forward to ritualistic rounds of golf and travel to exotic places, many of them find themselves concerned that their money may not hold out for the duration of their life. According to a 2010 survey by the Employee Benefit Research Institute, 35 percent of Americans—up from 30 percent just a year ago—feel financially ill-prepared for retirement. "A distressing number [of Americans] have no savings at all," says Jack VanDerhei, a coauthor of the survey. So how can you be sure you're in the best position to take the plunge and leave the workforce? NEWSWEEK consulted a variety of experts, who shared some of the best ways to plan for retirement in a post-recession world.

Run a projection.
You need to know what your retirement expenses will be, and that your retirement income will cover them. There are two good ways to do this: use a retirement calculator or hire a certified financial adviser. If you plan to use a calculator, Teresa Ghilarducci, Bernard Schwartz professor of economics at the New School for Social Research, suggests using ones that presumes a zero rate of return on investments. Some good examples can be found at Choose to Save and at AARP. Or check to see whether your financial-services provider offers a calculator that can preload your information. If you would rather have a professional do the work, then consider hiring a fee-for-service financial adviser.

Once you pick a way to get projections, it's important to distinguish between guaranteed sources of income, like pensions, and those that fluctuate over time, like 401(k)s, says Jean Setzfand, director of financial security for AARP. Then make sure the guaranteed income sources can cover your basic living expenses, like home-maintenance costs, food, and medicine.

Assess future health-care costs
According to a recent University of Michigan Law School study, medical costs are a major contributor to bankruptcy among older Americans. So it's critical to pay special attention to this expense. Setzfand says that an important part of planning for long-term care is deciding how you'll pay for it, since Medicare coverage will not cover most of these services. For help with the process of factoring in these costs, an estate attorney or a financial planner is the best bet.

Pay down debt.
Don't even think about retirement until you can pay down any nondeductible debt you have, such as credit cards and car loans, says Bill Losey, a certified financial planner. If possible, Losey suggests you also pay off your mortgage, but if you can't, make sure it's your only outstanding debt.

Consider downsizing.
For most people, their house is their largest asset and biggest expense. Selling it and moving to a smaller residence frees up money, plus it saves on real-estate taxes, insurance, and maintenance costs, says Steven Sass, program director for the Center for Financial Literacy at Boston College. You could also consider relocating to an area with a lower cost of living, like the Sun Belt. Although it's not the best time to sell, your home may still be worth more than one in another area. By moving from San Diego to Arizona, for example, you can reduce your cost of living by 40 percent, says Jonathan Pond, AARP's financial ambassador.

Hit the reset button on retirement.
There are several reasons to postpone retirement, the biggest being an added layer of safety to your nest egg. Already, the economy has caused the average person to delay retirement for three to five years, says Jim Firman, president and CEO of the National Council on Aging. But it can really pay off. For example, you can double your monthly income from Social Security and retirement by delaying retirement for eight years. Don't want a full-time job? Working part time for an additional five years can increase your total post-retirement lifetime income by 40 percent.

Make a post-retirement résumé.
If everything goes according to plan and you retire with a comfortable amount of savings, you should still update your résumé in case you need to re-enter the workforce. John Nelson, author of What Color Is Your Parachute? For Retirement, suggests turning your leisure pursuits into transferable skills. For example, you can emphasize the leadership abilities you developed by running a local committee or club. Also, stay in touch with your professional network since you're more likely to find a better job through your previous work contacts.