BOSTON (CBS) – The last phase of your financial life is to enjoy the fruits of your labor. Retirement! But if you have not saved enough during your working career you may find yourself coming up short.

The most common goals:

  • Make the money last as long as you do.
  • Travel
  • Spoiling the grandkids

In my example, a retired couple age 66 owning a home without a mortgage and have begun collecting Social Security benefits of $40,000 and a small pension paying $10,000 a year with no cost of living adjustment. Their IRAs are worth $250,000 and they are all invested in bonds.

But to maintain their current life style they need an income of $65,000. That means withdrawing $15,000 from the IRAs and that will increase each year due to inflation.  That IRA withdrawal amount could be up to $20,000 in ten years so they can maintain their current lifestyle. Inflation is a nasty reality of retirement!

And if there are any major purchases such as a car or new roof that also must come out of the IRAs.

When one of the couple dies, the surviving spouse will receive only one Social Security check, the larger of the two checks and a smaller pension. Living expenses will be less but not by very much if the surviving spouse stays in the same house.

Consider some alternatives:

  • Get part time jobs to supplement your retirement income while you are in your 60s
  • Downsize your current home and invest the profit
  • Modify your current life style so you need to withdraw less from the IRAs
  • Invest some of the IRA money in the stock market
  • Move in with the kids (just kidding!)

Instead of a cruise to Alaska you look for budget trips; visiting your sisters on the Cape and in Vermont or use elder hostels.

As for spoiling the grandkids, spend time not money on them. Teach them to swim, to fish, to garden, to knit, to cook.

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