Soon-to-Be Retirees: 5 Things You Should Do

Stay on the Job Part-time

Instead of cutting the cord completely during retirement, one option if you think you might not have enough money to retire completely, what you can do is talk to your boss, talk to Human Resources and see if you can work part-time after your retirement.

You still might be able to get all your health benefits and get your 401k matched. So you're sort of easing out of retirement instead of walking out and never coming back.

Work Longer

This is the tough one. And if you can not work longer that's great but if you're in a position where because of the market activity lately you think you may be in a position where you might not have enough income well I would recommend you starting to think about working an extra couple of years.

Don't Panic

You may still have more than enough to retire comfortably. Before you have visions of working until you're 92, run the numbers. Here's a two minute calculation to see where you stand:

(a) What will your annual expenses be during retirement?
(b) How much will you get each year from Social Security and/or company pension plans?
(c) Multiply your investment accounts by 4 percent.

If your combined income from (b) and (c) is more than your expenses from (a), you're not in bad shape. If it is less, consider cutting your retirement expenses or doing one of the other tips above.

The PERK System -- The Quickest and Easiest Way to Cut Your Expenses

So you want to reduce your expenses and save a little more each month? Oh, what's that? You don't want to create a budget? I don't blame you! Budgets take forever to create and nobody sticks to them. The PERK System is easy (dare I say fun?) and most people I work with have been able to reduce their expenses by several hundred dollars a month in about 20 minutes. A much more detailed version of this strategy and other money-saving and investing tips are discussed in my #1 bestselling book, The Six-Day Financial Makeover (yup, that was a shameless plug—sorry, OK, not really).

Enough talking. Let's light this candle. The PERK System is just two steps:

Step 1

List all of your expenses and add them together. Include recurring monthly expenses (e.g., rent) as well as those that occur less frequently (e.g., auto insurance).

Step 2

Now the fun part! Next to each expense write either P for Postpone, E for Eliminate, R for Reduce, or K for Keep:

Postpone – These are expenses that you can put off for a while. For example, a house remodel project, vacation, or new car purchase.

Eliminate – These are expenses you can completely eliminate, such as a gym membership you never use, premium cable channels you never watch, or newspapers you subscribe to but never read.

Reduce – Any expense that you are willing to cut back on qualifies for Reduce. For example, if you go out to lunch every day at work but are open to bringing a lunch twice a week, mark the expense Reduce. In this case, you are reducing the frequency of the expense. Likewise, you could continue to go out to lunch every day, but go to less expensive restaurants. Both situations reduce your expense.

Keep – Many fixed expenses, such as rent, insurance, and food are necessary and should be marked Keep.

Now recalculate your revised expenses. Voila! It should be less than when you started. So that's it! If you've followed along, you're thinking one of two things: This is amazing. In the time it takes to watch a re-run of "Three's Company," I've slashed my expenses. Now I'll be able to save more each month. Or you're thinking this was a waste of time because you weren't able to cut your expenses at all.

If you're in the first camp, congrats! Go forth and prosper. If you're in the second camp, it means you wimped out and didn't Postpone, Eliminate, or Reduce. Usually this means you weren't aggressive enough. Your Netflix account, umpteenth shoe purchase, eating out habit, and trip to Vegas are not Ks. If you are serious about cutting your expenses, go back through your list and start replacing the Ks with Ps, Es, and Rs.

Of course, sometimes all those Ks really are Ks. If you're completely tapped out where all of your income goes to necessities, such as rent, insurance, food, and transportation, there may not be much you can do with your expenses. Instead of focusing on your expenses -- where it seems there's nothing you can improve -- focus, instead, on your income. Think about it. If your expenses stay the same but you're able to boost your income by $100 or $200 a month, all of this extra money can be saved. If you'd like to learn how to convert your hobbies and passions into extra income, as well as other financial tips, you can sign up for my free newsletter by going to SixDayFinancialMakeover.com. Good luck!

For more advice on weathering the financial storm you can visit www.sixdayfinancialmakeover.com.