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Work Till You Die

A Fool's top 10
The telltale signs of the saver are obvious: the sack lunches, the beat-up jalopy parked in the company lot, the fits of giggling giddiness accompanying the opening of a quarterly 401(k) statement.

The cues that someone is destined to work till at least age 80 are just as obvious, though not nearly as pleasant. Here are the top 10. Drumroll, please:

10. The mayor of Las Vegas sends a thank-you card after each visit.

9. You go through shoes faster than Imelda Marcos on a sugar high.

8. You have a table reserved at the local Taco Bell.

7. You're strung out on eBay.

6. You think balancing a checkbook is a magic act. Literally.

5. You last visited a grocery store during the Nixon administration.

4. "Gold-plated" is your favorite phrase.

3. Your $500 weekend jaunts to the spa include a full primping. And that's just for your dog, Fluffy.

2. You've already refinanced your new 2007 BMW 700 series to support your $30-a-day latte habit.

And the no. 1 sign that you will still be working at age 80: Your son is the 40-year-old savings virgin. And, yes, Mom and Dad, he still lives at home.

Sad, isn't it? Well, Fool, this doesn't have to be you. Read on to learn how to put your moola to work so that you can retire when you want, how you want.

Spend later, retire earlier
The best Fool for such advice is Robert Brokamp, editor of our Rule Your Retirement newsletter service. So I asked him for two money-management tips he's shared with his subscribers. Check out his responses:

Location, location, location. "You can increase the size of your nest egg by as much as 15% by making sure you are practicing smart asset 'location' -- putting the right investments in the right accounts." Indeed, some investments are actually better off outside your 401(k) or IRA. Take dividend-paying stocks, for example. Big firms like Heinz (NYSE: HNZ  ) , General Electric (NYSE: GE  ) , and Johnson & Johnson (NYSE: JNJ  ) all pay above-average dividend yields. And their distributions are taxed at the same rate as long-term capital gains, or 15%, so long as you hold them in a taxable account. Not so in a 401(k). All gains in tax-deferred accounts -- which include the 401(k) and most IRA accounts -- are taxed at ordinary income tax rates, and that includes dividends. Of course, given enough time, the tax hit may not matter. Nevertheless, it's hard to ignore the cushy treatment the IRS is giving to taxable payouts. (Subscriber access to more on this topic can be found here.)

Stop eating your retirement. "Skipping lunch at the likes of McDonald's, Wendy's, or Chipotle just two days a week could save $1,560 annually, which would add up to roughly $75,000 for your nest egg after 20 years of 8% annual growth." And you can get that kind of return on the cheap using funds that mirror the market. The Vanguard Total Stock Market Index (FUND: VTSMX  ) and iShares S&P MidCap 400 Index (AMEX: IJH  ) are two favorites of Motley Fool Champion Funds advisor Shannon Zimmerman. (Learn more in this special pdf report for subscribers.)

But, of course, there's plenty more you could do. Many of the best ideas have already found their way into the pages of Rule Your Retirement. You can sample them all by test-driving the service for 30 days. It's completely free of obligation.

A Foolish finale
So, what did we learn? First, don't buy shoes like Imelda Marcos does. Second, do locate your assets in the right accounts. Third, don't eat your retirement. And, finally, do pass this article on to your cash- and credit-challenged friends. Oh, OK, that wasn't part of the lesson plan. But it's a good idea, right? I mean, really -- isn't one 40-year-old savings virgin more than enough?

Heinz is a Motley Fool Income Investor recommendation.

Fool contributor Tim Beyers loves being called a complete Fool. He invites you to join the fun. Tim owns shares in the Vanguard Total Stock Market index fund. You can find out what stocks are in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.

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