About one in four 65-year-olds in America today will live past 90, and one in 10 will live until at least 95. Life expectancy has increased dramatically, going up an average of two months annually from 1960 to 2015 in the U.S. So, the great news is, odds are you'll enjoy a long retirement. 

The bad news: You're going to have to fund that retirement with far less help than past generations had. Just 33% of private sector workers have a pension today, and tomorrow's seniors are facing Social Security benefit cuts thanks to projected shortfalls in the Social Security trust fund starting in 2034. 

Since funding your retirement may fall largely on your shoulders, there are some rules to follow to ensure you'll have the money you need for your golden years. 

Binder with retirement savings plan next to coffee and calculator

Image source: Getty Images.

1. Save early and aggressively for retirement

Conventional wisdom says saving 10% of your income will give you enough money for retirement. Conventional wisdom is probably wrong.  

This table -- which shows how much you'd end up with by saving 10% of an average $51,000 salary -- reveals the problem.

If you don't invest early, saving 10% won't give you enough. The $372,840 nest egg you'd amass if you started saving at 40 -- assuming everything goes right and returns are higher than most experts project -- would give you less than $15,000 in annual income during retirement. That's just not enough for most seniors, especially when factoring in inflation.. 

Age You Begin Investing 5% Return 6% Return 7% Return 8% Return
20 $814,470.00 $1,080,000 $1,460,000 $1,970,000
30 $460,633 $568,317 $705,008 $878,815
40 $243,408 $279,809 $322,570 $372,840
50 $110,050 $118,707 $128,158 $138,475
60 $28,180 $28,748 $29,328 $29,919

Author calculations.

Unless you've started early and you get lucky with returns, saving 10% simply isn't enough. Instead, aim to save at least 15% of your income for retirement. And remember, no matter how old you are when you start investing, saving more pays off. Adding just $1,000 to your 401(k) per year starting at age 30 could net you an additional $123,337 by age 67, assuming a 7% rate of return -- and it would only cost around $38.40 per paycheck if you're paid biweekly. 

To find extra cash for investing, look to cut unnecessary spending. Eating more meals at home, making a meal plan to avoid throwing out leftovers, cutting out fees and subscriptions you no longer need, and cutting cable are all simple changes.

While making a budget to overhaul spending is helpful, the simplest approach is to set up automatic withdrawals to fund retirement and live on what's left of your paycheck after contributions are deducted. 

2. Claim Social Security at the best possible time

Half of married couples and almost three-quarters of single people receive at least 50% of their retirement income from Social Security. Living on Social Security alone is difficult because average benefits put you close to federal poverty levels.

While benefits may not be worth a fortune, you still want to maximize the amount you receive. The key thing to know is your full retirement age (FRA). If you were born after 1960, your FRA is 67. If you take benefits before FRA, your benefits will be reduced by 5/9 of 1% for the first 36 months and by an additional 5/12 of 1% if you claimed more than three years early.

If you were born after 1943 and delay your benefits past FRA, you'll get an increase in benefits of 2/3 of 1% per month until age 70, when benefits stop increasing.

Age You Claim Benefits Impact on Benefits Compared With FRA
62 30% reduction
63 25% reduction
64 30% reduction
65 13.3% reduction
66 6.7% reduction
67 --
68 8% increase
69 16% increase
70 24% increase

Data source: Social Security Administration.

To decide when it makes sense to claim benefits, calculate your break-even point -- the point at which your higher monthly benefits make up for years of lost benefits for claiming late. If you'd receive the average Social Security benefit of $1,413 at FRA but claim at 62, your benefit is reduced by around $424 monthly to $989 per month-- $11,868 annually.  From age 62 to 67, you'd receive $59,340 in benefits. If you instead claim at 67, it would take you 139 months -- 11.6 years -- of receiving a $424 extra per month to make up this missed income. If you live past 78.6, you'd do better than breaking even by waiting. 

Sometimes, you have no choice but to claim benefits before FRA. But, if you can, evaluate your options and choose a claiming strategy to get as much money as possible. If you're married, the process is even more complicated because you could potentially claim on a spouse's work record.  Consider talking with a financial planner to discuss claiming strategies -- or read up about options online -- because once you claim benefits, it's impossible to undo your decision unless you stop your benefits altogether.

3. Be willing to take some risks

Losing your hard-earned money isn't desirable, so its tempting to choose safe investments like bonds or certificates of deposit. Unfortunately, you need to take some risks because safe investments typically have very low rates of return -- especially in the current market. 

This table shows how much you'd need to invest to retire with a $1 million nest egg at different rates of return over 35 years of investing.

Return on Investment Annual Savings Necessary to Become a Millionaire
1% $23,776
2% $19,610
3% $16,058
4% $13,055
5% $10,544
6% $8,466
7% $6,761
8% $5,373
9% $4,235
10% $3,354
11% $2,637
12% $2,068

Author calculations.

On a salary of around $51,000, investing about 13% of your income over 35 years would make you a millionaire -- assuming a 7% rate of return. But, if you invest mostly in bonds and earn only 3%, retiring with $1 million would be all but impossible, since you'd need to save over 30% of your income. 

The need to take some risks doesn't end during retirement, either. While seniors should invest more conservatively because they don't have time to recover from market downturns, being too conservative increases the chances you'll run out of money. 

There's a simple way to decide how to allocate your investments: Subtract your age from 110 and put that percentage of your money in stocks. Following this basic rule, a 20-year-old would have 90% of their assets invested in stocks while an 80-year-old would have just 30% in the stock market and the rest in safe investments. There are simple ways to invest in stocks, such as by building a portfolio of ETFs. 

Follow these rules to have a secure retirement

If you invest early and aggressively, invest in the right things, and claim Social Security at the right time, you can enjoy that longer life span projected for you without worrying about running out of cash. It requires a little planning, but your future self will thank you for following these key retirement rules.

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