Stretching your retirement dollars doesn't mean doing without it simply means spending more carefully and efficiently. That advice, says the Georgia Society of CPAs, is the key to living on a fixed income during retirement. By reducing spending, working at a second job, and making wise financial and housing decisions, you can live more comfortably in retirement.

Spend more efficiently

This advice may appear to be obvious, but what's not so obvious are the steps you can take to trim your expenses significantly. The first step is to get rid of as much debt as possible, preferably before you retire. This includes paying off your home mortgage as well as any credit card or home equity debt. Once you've done this, you may find that you need a lot less money to live on than you thought.

Then, take a fresh look at your insurance requirements. If your children are grown and tuition payments are behind you, you may no longer need life insurance. Raising the deductibles on your homeowners and auto insurance policies can save you money as well. On the other hand, when it comes to health insurance, your need for adequate coverage takes on additional significance. To save on premiums, consider switching from a traditional indemnity policy to a managed care plan. Locating better Medigap policy deal is another potential money saver.

Once you are retired, look for ways to trim your entertainment expenses without depriving yourself. Whether it means renting a movie rather than going to one or borrowing a library book instead of buying the latest best seller, little cuts can add up to big savings. Also, be sure to take advantage of special deals that airlines, hotels, and restaurants offer retirees. Many retail outlets also offer discounts on certain days to retirees and older adults.

Take a post-retirement job

Whether the underlying need is for extra money or self-fulfillment, more and more retirees are deciding to work at least part time in retirement. If your plans call for a post-retirement job, you have a number of options. You can look for positions in your current field, perhaps on a part-time or work-at-home basis. However, you might get more enjoyment out of turning something you've enjoyed as an avocation into a sideline business teaching a course, refinishing furniture, gardening or landscaping.

Concerned about losing Social Security benefits? If you are between ages 62 and 64, you can earn up to $9,120 in 1998 without affecting your benefits. Retirees age 65 through 69 can earn up to $14,500 before facing reduced benefits, and, one you turn 70, you can earn as much as you like with no reduction in benefits. There are also limits to your gross income before your Social Security benefits are taxed. That's why it's important to make sure your new venture is not going to cost you more in income taxes, reduced benefits and work-related expense than you're making.

Know how and when to withdraw

When you start withdrawing funds for retirement, as a general rule, it's best to begin with investments that aren't tax sheltered such as Social Security and bank savings accounts, stocks and bonds, and mutual funds. This allows the funds you have invested in tax-sheltered 401(K)s, Keoghs and IRAs to continue compounding tax-free as long as possible, Keep in mind that any funds you withdraw will be taxed as ordinary income. What's more, generally, you can't tap into retirement accounts without penalty until you reach age 59.

Make a move or use equity in your home

If your current home is more house than you need, consider moving to a smaller home or relocating to an area where the cost of living is lower. This may be easier now that the one-time exclusion for taxpayers age 55 and older has been replaced by more lenient capital gains rules. Under the new tax law, you generally can exclude up to $250,000 ($500,000 is married, filing a joint return) of gain realized on the sale of a principal residence as long as you owned and lived in the residence for two out of five years before the sale date.

If you prefer to stay in your home but don't think you'll have the cash to make ends meet, the reverse mortgage lets you borrow against the equity you have built up in your home and receive the proceeds in the form of regular monthly payments or a line of credit you can draw upon as needed. The amount of money you can take out of your home depends on your age, the home's market value, and current interest rates. Just be aware that the more cash you take out of your home, the more you risk losing ownership completely.

If you would like more advice concerning how to make the most of your retirement income, you may want to consult a CPA.

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