Nowadays, people are living longer than ever, so it's important to plan ahead for a long retirement. In fact, according to the latest data, there is a 45% chance of one or both partners in a married couple (both spouses being 65) reaching the age of 90, and an 18% chance that one will live to 95.

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Source: 401kcalculator.org via flickr.

With that in mind, here are three ways to make sure your money lasts longer than you do, even if you live to be 100 years old or more.

Be flexible with your spending
The "4% rule" of retirement has been popular with financial planners for some time now. Basically, it says that to give your money a good chance of lasting throughout your retirement you should withdraw 4% of your savings during your first retired year, then adjust this amount upward to account for cost of living changes as times goes on.

My problem with this "rule" is that your expenses and investment returns won't be the same every year, so why should you withdraw the same amount of money every year?

To make your money last, you should use a somewhat flexible withdrawal strategy, based on your lifestyle and your investment performance.

For example, if your expenses are relatively low one year (you don't have any vacations planned, medical expenses are relatively limited, etc.), it could be a good idea to cut back on withdrawals and leave more money to earn returns and compound for the future.

The same can be said about years when the market isn't performing too well. If your investments have a bad year, it could be a good idea to trim some unnecessary expenses and wait until things turn around. After all, the more you leave in your account, the more gains you will capture when the market rebounds. Then, in years when your investments perform well, maybe treat yourself a little more. 

Wait as long as possible for Social Security
Social Security should not be your main source of retirement income, but it is certainly nice to have. And the higher your Social Security checks, the less reliant you'll be on withdrawals from your retirement savings.

You can begin collecting Social Security as early as age 62 years or as late as 70. While most people realize that the longer you wait, the better your checks will be, many don't realize just how big a difference it can make.

For instance, if you were born after 1960, your full retirement age is 67. If you can expect $1,000 per month in Social Security at your full retirement age, you can expect the monthly payments to drop to $700 if you choose to receive benefits starting at age 62. On the other hand, by waiting to age 70 your monthly checks would increase to $1,240.

Waiting until age 70 instead of receiving benefits at age 62 means your checks will be nearly 80% higher. That can make a big difference in how much you'll need to withdraw from your retirement savings.

Now, the Social Security system is designed to take life expectancy into account, making benefits similar if you live to your expected age regardless of when you choose to start receiving checks. However, since we're looking at a "what if" scenario of living longer than you expect, you'll end up receiving more income in the long run if you happen to live past the age the Social Security Administration expects.

For instance, in our previous example, if you live to 80 years of age, you'll end up collecting a total of about $151,000 in benefits if you start collecting at age 62. If you start at your full retirement age, you'll collect about $156,000, and if you wait until 70, you'll collect a total of less than $149,000 (all of these numbers will be slightly higher in actuality to account for cost-of-living increases). So, in this case, you would actually be better off collecting benefits earlier than age 70.

On the other hand, if you live to 90, the total amount of Social Security you collect will be about $235,000 if you start at 62, $276,000 if you start at 67, and $297,600 if you wait until 70. So, if you outlive the experts' predictions, you'll do much better over the long run by waiting.

Buy some "retirement insurance"
A deferred-income annuity can provide you with peace of mind if you're still worried about outliving your nest egg.

Basically, a deferred-income annuity is an agreement to pay a company a certain amount of money now in exchange for the promise of a set amount of income at a later date. For example, at today's rates, a 60-year-old man might pay $50,000 now for a deferred-income annuity that will pay him about $2,000 per month for the rest of his life, starting at age 85.

There are several options for deferred-income annuities, including some that have a guaranteed payout, even if you don't make it to the payout age. For example, a "period-certain" deferred income annuity guarantees to make payments for a set amount of time, such as 20 years. Such a condition will slightly lower the payments you receive, but might be worth considering.

Think of a deferred-income annuity as insurance for your retirement that can protect you financially in the event that you live longer than expected.

Now, there are some downside to annuities as well. Most of them have a significant amount of fees included in the price, such as sales commissions, underwriting fees, and management fees for the annuities' underlying investments.

And, while $50,000 for $2,000 in monthly income starting 25 years from now sounds like a pretty good deal, it's not too difficult to achieve similar (or better) returns simply by investing in index funds and letting your money compound over time.

However, if you want to completely eliminate the market's performance from the equation, and want to set up worry-free income in your old age, a deferred-income annuity may be worth a look.

It's better to overprepare
When it comes to your retirement, it is always better to err on the side of caution. It's better to plan to live to 100 and only make it to 80 than it is to have a financial plan for until you turn 85, and you end up living to 100.

In a nutshell, you should plan for a very long retirement. If you don't live to 100, you'll leave a little extra for your loved ones. If you do, you'll never have to worry about money no matter how long you stick around.

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