You've worked hard all your life and are looking forward to a time when you can leave your career behind you and enjoy the fruits of your labor. But there's a lot of thought that needs to go into retirement, and if you don't plan for it carefully, you could wind up in financial trouble sooner than you'd think. Here are a few retirement rules to keep in mind as you map out your future.

1. You can't live off of Social Security alone

Almost 25% of seniors depend on Social Security as their single source of retirement income, while 65% rely on it to provide the bulk of their income. But in reality, the average American can't come close to retiring on Social Security alone. That's because Social Security, in a best-case scenario, will only replace about 40% of the typical worker's pre-retirement income. However, most seniors need at least 80% of their former earnings to cover the bills in retirement, and that assumes a relatively modest lifestyle.

Senior couple dancing

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These days, the average Social Security recipient collects about $1,360 a month, or $16,320 a year. If you're single, and you don't have any outside savings, that's hardly enough money to live on. Even if you're in a dual-income household, and you and your partner each collect $1,360 a month in benefits, that's still only $32,640 a year to cover all of your living expenses. Given that the average healthy 65-year-old couple today will spend $400,000 on healthcare alone in retirement, over a 20-year period, that's $20,000 a year right off the bat. With Social Security alone, you'd be looking at a mere $12,640 per year to cover housing, transportation, utilities, food, clothing, and other such necessary expenses for two people, and that's just not feasible.

You'll therefore need to do a serious evaluation of your savings before deciding whether to pull the trigger on retirement. If you're a younger worker (say, in your 30s or 40s), you still have ample time to sock money away, but if you're in your late 50s or 60s without much of a nest egg, you'll need to start playing catch-up immediately.

Thankfully, workers 50 and older can contribute up to $24,000 a year to a 401(k), so if your employer offers a workplace plan, and you prioritize your savings, you can amass at least $120,000 in five years' time. If you're older and don't have the option to fund a 401(k), your next best bet is to max out your IRA at $6,500 a year (the limit for workers 50 and over), and save additional funds elsewhere, such as a traditional brokerage account or annuity.

2. Your lifestyle needs to align with your savings level

Many people assume that once they retire, they'll manage to maintain the same lifestyle they did during their working years. But unless you've saved well, you may need to cut corners to make up for the fact that you're living on a fixed income (and, most likely, a lower one at that). In fact, it might surprise you to learn that 46% of seniors spend more money, not less, during the early stages of retirement, and those who do risk depleting their savings prematurely. 

When you think about your lifestyle in retirement, don't assume you'll be able to swing the same set of expenses you're managing as a full-time earner. You may need to come up with a plan to trim your living costs, whether it's downsizing your home, unloading a vehicle, or making smaller adjustments that achieve a similar effect. Either way, map out a budget before you retire so you have a framework to follow as you adjust to your new financial situation.

3. Your portfolio should still contain stocks

Seniors are often advised to move away from risky investments, like stocks, and load up on safer ones like bonds. And while that's solid advice in its own right, it shouldn't be taken to an extreme.

Though stocks are riskier than bonds, in today's interest rate environment, bonds do a poor job of keeping up with inflation. And when you're in a situation where you're living off of fixed benefits, plus however much you've accrued in your nest egg, your goal should actually be to keep growing the latter in retirement so your investments earn enough to keep pace with your rising living costs.

How much of your portfolio should stay in stocks? It depends on your circumstances and tolerance for risk, but if you're in your 60s, stocks should still comprise a good 40% to 50% of your investments. Keep in mind that stocks don't just deliver high returns; in some cases, they also pay dividends, which is additional income you'll no doubt come to appreciate.

The more you prepare for retirement in advance, the better positioned you'll be to avoid financial problems once you get there. Countless seniors stress over money, and it's often because they jump into retirement without really thinking it through. Having a plan in place for retirement could spell the difference between enjoying your golden years to the fullest, or struggling to make ends meet.

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