The Best Budgeting Strategies for People Nearing Retirement

If you haven’t started carefully managing your money, now is time to buckle down.

Seniors on the couch looking at the computer and studying financial information.
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Deppe points out that by taking Social Security at age 62, the husband will not only reduce his benefit by as much as 25 percent, but the survivor benefit will be reduced as well. "The survivor benefit is locked into the amount when the husband, in this example, takes the money. For married couples, the decision to take Social Security benefits should be a joint decision, as it can affect each other," Deppe says.

Plan to get sick. If your mindset is that the glass is always half full, this might not sound like a pleasant thought. But you don't have to be a senior citizen to notice that health issues tend to crop up as you get older. So be ready for them.

"If you haven't already, now is a good time to think about purchasing long-term care insurance or contributing to a health care savings account," Keady says. "You can also help yourself by choosing the right Medigap plan, which many Americans purchase to cover the costs in excess of Medicare coverage."

[See: 6 Ways Retiring Can Be More Affordable.]

These Medigap plans come in many different shapes and sizes, with varying benefits and costs, adds Keady, who suggests researching every angle before buying a plan. But he definitely thinks it's smart to get a Medigap plan. "The right decision early in retirement could save you tens of thousands of dollars during retirement," Keady says.

Take a test drive. When you think you're ready for retirement, take a "test drive," suggests Chris Augelli, a vice president at ADP Retirement Services, headquartered in Roseland, N.J. To do this, he suggests coming up with a budget for your post-retirement life, and then living within that budget while you're still working.

You'll either come out of your experiment feeling more confident or less than ever, Augelli says.

Either way, better to find that out now.