How to play by the new money rules

Traditional advice: Reap the rewards of a lifetime of saving.

• If you've diligently socked money away, you should be able to retire early.
• To preserve wealth, shift more of your nest egg into bonds.
• So you won't run out of money, keep retirement withdrawals to 4% a year and adjust the payout annually for inflation.

What's changed:

• Volatile markets can make early retirement risky, even for dedicated savers.
• Bonds may not provide enough shelter from market storms.
• If you aren't flexible about withdrawals, your money may not last your lifetime.

The right moves now:

Don't make an early exit. Unless you've amassed a fortune, try to work until at least 66 to 67--when anyone born in 1943 or later qualifies for full Social Security benefits. You'll gain time to save more and for your wounded portfolio to recover. Plus, you'll cut the number of years you'll be tapping your nest egg.

Give the boss a reason to love you. Just because you need to keep working doesn't mean your employer will accommodate you. Make yourself vital: Know the latest technology and gain a rep as a problem solver. Plan B: Go part-time, which works almost as well for preserving your nest egg as a full-time gig.

Make cash part of your investment strategy. Your portfolio should have the equivalent of two to four years' worth of living expenses in cash (in addition to your regular emergency fund). That way you won't be forced to sell stocks or bonds in a down market.

Give up your raise, temporarily. Already retired? Forgo the annual inflation increase on your withdrawals to buy time for your portfolio to bounce back. Giving up a 3% raise on a $40,000 payout costs $1,200--a small price to pay for greatly improving the odds that your money will last as long as you do.

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