Maximize your investments

wisely and drawing funds from it prudently, you can make

the most of your retirement nest egg. Many new retirees

assume they need to reduce their exposure to investment

risk by putting their nest eggs into bonds and cash, but

CPAs say you should keep anywhere from 40 to 60 percent

of your retirement savings in equities. Doing so allows

your assets to continue to grow and provides you with

some protection against inflation. Also, you can continue

to build your retirement savings by reinvesting your

interest and dividends.

When it becomes necessary

to tap into your savings, withdraw assets from your

taxable accounts before you withdraw assets from your

tax-deferred accounts. Doing so will allow the money in

your tax-deferred plans, such as 401(k)s or Individual

Retirement Accounts, to continue compounding tax-free for

as long as possible.

Reduce housing costs

When it comes to reducing

spending, it makes sense to start with housing, the

biggest monthly outflow for most retirees. Consider

whether it makes sense to sell your home, pay off your

current mortgage and buy a smaller home or condo with

lower property taxes, energy bills, and maintenance

costs. If you're willing to relocate to an area with a

lower cost of living and low or no income taxes, the

savings can be considerably greater. Before you choose a

location based on income tax savings, check what estate

taxes would apply to you there.

If retirement is still

several years away, do what you can to trim expenses or

boost income now so you can pay off your mortgage by

retirement. Having your house fully paid for at the time

you retire can go a long way toward making it easier to

live on a reduced income. If paying off your mortgage

isn't feasible, at least try to pay off any credit card

debt you may have.

Be creative. For some

people, home sharing might be a good way to reduce

housing costs and gain companionship. It takes careful

thinking and planning, but it can work. Another option is

to agree to perform housekeeping or maintenance services

in exchange for free or reduced rent.

If you're "house-rich

and cash-poor," a reverse mortgage, which acts like

a regular home mortgage in reverse, lets you use the

equity in your home as a source of income. Instead of

borrowing a sum that you pay back in monthly payments,

the lender typically pays you a monthly payment against

the equity in your home. The loan balance - the

amount you've received plus interest - doesn't have

to be repaid until you die, sell the house or move.

Reverse mortgages are complicated; be sure you completely

understand the terms before pursuing this option.

Enjoy less expensive

leisure activities

If golf is your game, try

finding a good public course and bypass expensive greens

fees at a golf club. If you favor tennis or swimming,

look for community courts or join the pool at your local

YMCA. If you like to travel, travel out of season when

others don't. And be sure to take advantage of the many

deals that airlines, clubs, hotels and restaurants offer

to retirees.

Go back to work

Although at first it may

sound like an oxymoron, working in retirement is an

alternative that more and more retirees are pursuing. The

right job can provide welcom cash and self-fulfillment

and, if you find something that you truly enjoy doing, it

won't even feel like you're working.

If you're thinking about

entering the job market after a career as a homemaker,

consider how skills you have developed in raising a

family, managing a household, volunteering, or pursuing a

hobby might translate into marketable business skills.

Reduce health care costs

Joining a Medicare managed

care plan is a less expensive alternative to purchasing

Medigap insurance. Many of these plans provide

comprehensive coverage for a small monthly fee and/or a

small co-payment for office visits. On the down side,

with some plans your choice of doctors, hospitals and

other providers is limited to those in the plan's

network.

If it's payments for

prescription drugs that are ruining your budget, you may

be able to reduce your costs by asking your doctor to

substitute a generic drug. Or, you may be able to use a

mail-order pharmacy that charges significantly less for

some prescriptions, providing you can plan ahead and

allow time for delivery.

While the golden years

certainly don't come cheap, CPAs say that with careful

planning and the willingness to control your spending in

retirement, you can enjoy a satisfying retirement even if

you don't have millions in the bank.