60 Second Savings: Smart Spending for Retirement

Preparing for the golden years means storing away enough money to last through retirement and even beyond, if one plans to leave an inheritance.

And while most people are confident they will have sufficient money to live comfortably through age 85, according to a recent MetLife (MET Quote) survey, financial experts agree retirees should spend conservatively.

"Underestimate investment income and overestimate expenses," says Greg McBride, senior financial analyst at Bankrate.com. "The old adage that you lived on 70% to 75% of your income is really out the window because medical costs are going up at such a fast rate."

Also, he points out, with life expectancies stretching to beyond 80 years, people will inevitably need more savings for retirement.

Some good news for retirees, McBride says, is that there are a few expenses that are likely to decline once retirement begins, such as social security, Medicare taxes and life insurance. That said, experts still advise planning ahead and creating a budget based on projected retirement savings -- that includes 401(k) plans and individual retirement accounts (IRAs) in addition to personal savings, investments and home equity. From there, consider deductions like daily living expenses, travel costs, health care costs, outstanding debt and any gift giving.

To view Farnoosh Torabi's video take of today's segment, click here.