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By Jean Chatzky
Jean Chatzky

Whether it's fly-fishing, taking your camper to the Everglades or just traveling, everyone has got a little retirement dream. But to get there it's going to take a lot of planning. Here are three ways to make sure your money lasts after you leave the work force.

Convert savings into an immediate or longevity annuity
Take a lump sum of money and use it to buy yourself a paycheck. Depending on the circumstances, this paycheck can last the rest of your life and your spouse's life.  

Now, annuities don’t have the best reputation. There is a reason for this. Some annuities are so complicated it’s tough for professionals – let alone consumers – to understand them. Some have very high annual fees or surrender charges (a charge for getting your money out ahead of schedule.) Those are not the annuities I’m talking about here. I’m talking about very simple, straightforward ones. 

With an "immediate annuity" you take a sum of money at retirement and buy a paycheck. The amount you’ll get for your money depends on your age/life expectancy and interest rates. The older you are when you buy an annuity, the shorter your life expectancy will be – so the greater a monthly paycheck the same sum of money will buy you. When interest rates are higher, the size of the paycheck for the same sum of money will rise also. For that reason, it makes sense to not annuitize all at once, but to annuitize chunks of money over time as your fixed expenses rise. A longevity annuity works the same way: you buy it at say age 50 but don’t start drawing your paycheck until retirement. Because the money has that 15 years (or however many) to grow, your paycheck is much larger.

Withdraw your retirement funds slowly

The other way you get paid in retirement is to invest your money for growth and income in a way that makes sense based on your risk tolerance – then come up with a plan for how to withdraw your money. Many people focus on the 4 percent rule which essentially says that as long as you withdraw no more than 4 percent from your retirement accounts each year, the money should last you 30 years. 

Jean took viewers' retirement questions on Twitter in a live chat using #GetAPlan.

Unfortunately, as we’ve learned recently, if the markets tumble big during your first few years of retirement this rule is going to fail you. Instead, you want to be very conservative about how much you’re withdrawing in the early years of retirement, especially if the market isn’t performing well. The fact that so many people tell us they’re planning on working in retirement is a good thing – the income can subsidize a lower level of withdrawals. 

Stay in stocks.
You have to remember that even at 65 you still have a couple of decades to live on average and a decent shot at significantly more than that. That means you can’t put all of your money in safe havens. You still need at least some growth from stocks.

But how much should you keep in? Take 100 and subtract your age. That's about the percentage of your portfolio you should keep in stocks.