"I don't use a budget, but I keep our credit card and checkbook information on Quicken," says R. J. Dougall. "We use credit cards and pay them off every month." As for trimming expenses, the Dougalls use frequent flyer miles to travel, pay senior citizen prices at the movies, and recently sold a van they had to Phyllis' nephew. "We're trying to schedule our activities around one car, and so far, it's working."

5. Review your insurance needs. Make sure that you study your health insurance options before you retire, to avoid being hit with expenses that you didn't anticipate. "I didn't pay much attention to medical insurance, and I discovered that dental and eye exams and eyeglasses aren't covered by our Medicare and supplemental insurance," says R. J. "Since I have type 2 diabetes, I must see the eye doctor twice a year."

What about long-term care insurance? A few years ago, the Dougalls bought a policy that costs them $4,000 a year in premiums. "I wish we had bought it sooner; we may have paid less," R. J. says.

If you're looking at long-term care insurance, look at your life insurance too, says Murray Yolles, who is a retired tax expert and co-author with his son, Ronald, of "You're Retired, Now What?: Money Skills for a Comfortable Retirement". "If, for example, you have a $100,000 policy, and you die, that payment could take care of your spouse's long-term care needs," he suggests.

6. Go for growth when allocating your assets. Aside from managing your expenses, you may want to consider allocating some of your assets into stocks or stock mutual funds so that you have sufficient growth to cover inflation, and to fund the rest of your retirement, says Winfield. At the same time, when making that allocation, people need to be realistic about returns. "Over the long term, we can't expect the stock market to continue to perform as it has for most of this decade. We figure seven percent on a total return basis for your entire portfolio - eight or nine percent on stocks, and five to six percent on bonds."

What kind of asset allocation is right for you at age 65? "As always, the answer partly depends on your risk tolerance," says Winfield. "However, on a historical basis, you need to allocate at least 30 percent of your portfolio to equities to keep pace with inflation. For that reason, we suggest 30 to 70 percent in stocks and stock funds. At 75 to 80 percent, the additional volatility is not well rewarded in terms of return. Remember, in retirement, volatility can hurt you. If you're with- drawing assets when the value of your portfolio is dropping, you're withdrawing more units for a given number of dollars."

Winfield suggests that people keep one to two years' worth of cash on hand for expenses. "Then we'll ladder a bond portfolio so that a bond will mature each year for the next four or five years to provide needed income. That way, you know that your expenses will be covered for the next five years, which eliminates some of the fear. You allow the rest of your portfolio to stay invested to achieve a higher rate of return."

7. Review the rules for qualified retirement plan distributions. As you may know, there are IRS rules which govern withdrawals from retirement plans that you need to follow to avoid paying extra taxes and unnecessary penalties. "Our advice," says Yolles, "is to see a financial planner, tax or estate-planning expert to make the best decisions for your situation."

8. Reassess your plan periodically. Your needs will change every few years during the course of your retirement, so you should plan to adapt your strategy accordingly. Piazza suggests that there are three stages to retirement: an active, self- sufficient stage, an assisted living stage, and, sometimes, a nursing home stage.

Winfield agrees. "For that reason, in addition to doing long-term projections, we suggest you look at a five-year time horizon. That way you can make the necessary adjustments."