Boost your Social Security checks. Workers often sign up for Social Security benefits as soon as possible at age 62. But payments increase by 7 to 8 percent for each year a worker delays his or her start date between ages 62 and 70. "It's a much bigger payout if you can afford to wait," says Droms. Monthly checks are calculated using the 35 years you earned the most. Thus, every top-earning year in your 60s cancels out a year earlier in your career when you earned less.
Coordinate retirement with your spouse. Married workers can strategize about when to sign up for Social Security to maximize their total benefits. Spouses are entitled to Social Security benefits based on either their own earnings or checks equal to 50 percent of the higher earner's benefit. When one spouse passes away, the survivor's benefit for the other is the full amount of Social Security the higher earner received. "If you and your spouse are approaching retirement age, put together a plan for how to claim Social Security benefits," says Andrew Biggs, a resident scholar at the American Enterprise Institute and a former deputy commissioner of the Social Security Administration. "Claiming at different ages can increase total lifetime Social Security benefits as well as generating greater protection for a surviving spouse later in life."
Downsize your lifestyle. There's a reason retirees are known for hitting up early-bird specials and inquiring about senior discounts. Most don't have a lot of disposable income to burn. Downsizing into a smaller house or condo after the children move out or selling a second car previously used for a spouse with a separate commute can give a major boost to your nest egg. After you exit the workforce, consider relocating to a locale in the United States or even abroad where the cost of living and taxes are lower. A growing number of retirees are also sharing a roof with their adult children to cut costs for both generations. Generally, the grandparents provide some child care for grandchildren, and the rest of the family pitches in with elder care as needed.
Delay your retirement date. For workers without traditional pensions, a life of full-time leisure may be a thing of the past. Just over a quarter of Americans between ages 65 and 75 continued to work in 2008, according to the Census Bureau. Workers on the cusp of retirement with meager savings will have little choice but to continue working. Delaying retirement packs the double punch of giving you more time to tuck money away and reducing the number of years that your savings must last. "Putting off retirement a year or two can do really wonderful things for your retirement situation," says Droms. "Leave your money a bit longer, and give it a chance to recover without depleting your assets at a bad time to deplete them." But that doesn't mean you need to stick with a full-time job you dislike. About 40 percent of older workers cut back on their hours or transitioned into part-time work. Look into consulting, blogging, teaching, and other opportunities to bring in some extra income from your accumulated experiences.
Develop a nonfinancial plan. After you leave the workforce, the hours that used to be dominated by work can be spent however you wish. Come up with a plan to pursue a hobby, volunteer, or spend time with your grandchildren. "If you say, 'I'm going to retire in five years so I can start my own business, so I can spend more time with my family, so I can do something I love,' I think you are more likely to reach that goal," says Keller. But recognize the difference between goals and daydreams. Says Keller: "If retirement is a goal but you are not saving for it, then retirement is just a fantasy."