According to U.S. News & World Report, starting in 2012 and spanning 20 years, an average of 10,000 Baby Boomers will reach age 65 each day. That number seems startlingly high, especially considering research shows that many Baby Boomers are not fully prepared with a financial strategy to carry them through their retirement years. If you are a Baby Boomer approaching or currently in retirement, read on to learn three quick tips to consider if you have concerns about making your wealth last during your retirement.

Take Stock of Your Budget

First, take steps to understand your current spending habits so that you know your annual budget. This sounds like an easy step, but sticking to your budget during retirement is critical to your long-term success. Once you’re relying in part or in whole on your investments, it’s important that you have a sense of whether you can realistically sustain the lifestyle you enjoyed prior to your retirement. Your financial advisor should be able to provide you with the tools necessary to know where you stand.

Figure Out What You Can Spend

Once you’ve determined what your current spending habits are, compare what your expenses are now versus what they should be. You may have income from Social Security and other sources during retirement, but much of what you spend will likely need to be withdrawn from your investment portfolio.

A quick way to figure out what you can withdraw from your portfolio is to use the four percent rule. This rule is more of a general guideline that suggests how much of your portfolio you can withdraw each year over the course of retirement without jeopardizing how long your money will last. If you’re in or near retirement and your current lifestyle requires more than four percent of your portfolio value, you probably need to look for ways to cut spending. Of course, everyone’s situation is unique.

Whether you plan on retiring sooner or later than average, have certain non-negotiable expenses or hope to leave a bequest behind for your loved ones, you should consider the four percent rule a starting point from which you can work with your financial advisor to develop a plan that is tailored to your specific needs and goals.

Make Sure Your Portfolio is Retirement Ready

Lastly, you need to make sure that your investment portfolio is designed for retirement. Investing during your retirement requires a different approach than you’ve used prior to retirement. This is because you will be making regular withdrawals on your portfolio for living expenses, which leaves your portfolio much more sensitive to investment losses.

The worst thing that could happen to your money is to see losses early in retirement like those seen in the Great Recession of 2008-2009. If you’re taking money out of your portfolio when the market is down (consider that as a retiree, you likely need to withdraw money for living expenses), you’re hurting your ability to recover those losses when the market eventually recovers. This wasn’t necessarily an issue before your retirement, when you could hold your investments and weather the storm. But in retirement you need to money to pay the bills, so you are forced into a situation where you’re selling low.

Because avoiding heavy losses is so critical during retirement, it’s important to work with your financial advisor to develop a portfolio that provides necessary growth while limiting market losses to acceptable levels. Building a portfolio for retirement in today’s investment environment presents unique challenges. Eight years into one of history’s longest bull markets and with interest rates near all-time lows, retirees and advisors will need to get creative to develop a portfolio that strikes the right balance of risk and return.

Own Your Retirement

By combining careful budgeting with a well-constructed portfolio, you can retire on your own terms rather than worrying about what the market does. We’ve been helping our clients do just this for over 25 years by creating clarity around these financial decisions during their retirement.

If you found this blog informative or want to learn more, visit our website to download our new eBook, Retirement Distribution Planning: A Guide to Making Your Income Last, or check out our other blogs on retirement planning, .