To save money, the Social Security Administration stopped mailing annual Social Security statements to workers this year. These four-page mailings gave workers a personalized estimate of their expected Social Security payments based on their actual earnings history. Now workers will have to go online to get this estimate, and only some of the information provided in the statements is available online. Here's a look at how to predict how much you will get from Social Security in retirement.

Consider the averages. In June 2011, the average Social Security benefit was $1,180.80 per month. The maximum possible benefit for a worker retiring at age 66 in 2011 is $2,366. But to get this amount, the worker would need to earn the maximum taxable amount, currently $106,800, each year after age 21.

Familiarize yourself with the formula. Social Security benefits are calculated based on your 35 highest-earning years in the workforce, and are adjusted for inflation. If you don't have 35 years of earnings, zeros are averaged in for the years you didn't work at a job in which you paid into Social Security. The proportion of your income that is replaced by Social Security varies based on how much you earn. Consider a worker who turns 62 in 2011. To calculate his benefit, the first $749 of his average monthly earnings is multiplied by 90 percent, the next $3,768 by 32 percent, and the remainder by 15 percent. The sum of these three amounts equals his initial monthly payment amount. Workers also have cost-of-living increases added to their benefit beginning at age 62, even if they don't begin to receive

When it comes to retirement planning, sooner is always better than later.

Consider this illustration in the importance of time in retirement planning: a 25-year-old who saves $5,000 every year for 40 years will retire with nearly $1 million, assuming a 7 percent rate of return. A 35-year-old who begins saving $5,000 annually will turn 65 with around $472,000.

To get close to $1 million in 30 years rather than 40, the 35-year-old would have to save twice as much as her younger counterpart.

Consistent saving as early as possible is key, but other factors will contribute to the success of your retirement plan. To ensure that you arrive at the promised land of retirement flush with cash, incorporate these 10 simple guidelines into your financial planning.

1. You shall get out of debt

Certain types of debt are toxic to building wealth. High-interest credit card debt can fester in your finances and cost more than can possibly be regained through saving and investing. Still, if you have access to a retirement account at work, take advantage of it. (See Rule 5.)

"If it's costing you a rate of interest and you're not getting a deduction for it, that would be the first order of business before you do any significant saving," says Brian Kuhn, Certified Financial Planner at

Many advisers, despite the advent of new technology, new products and new thinking, use some fairly old-fashion strategies to create a retirement-income portfolio.

They tend to use the same or slightly modified portfolio they did when devising a saving-for-retirement portfolio, and simply draw down 4% per year. Or they use what's called a bucket approach, the principles of which are based somewhat on the asset-liability matching techniques used by pension plans.

Much has been written about the 4% withdrawal strategy (and its shortcomings), less about the bucket strategy. In my case, the bucket strategy has become the topic du jour for a few reasons.

In 2009, UBS became one of a growing number of large brokerage firms to unveil a bucket strategy. In its version, the first risk bucket contains funds required to fulfill the liquidity needs for an individual over some predefined time horizon.

The second or core bucket contains the bulk of an individual's assets and should reflect the investor's risk preference and be positioned for the maximum return vs. risk.

And the third bucket, the leverage bucket, contains a mix of riskier assets that should be used as a risk overlay and offers the investor the opportunity to dial up or dial down their risk tolerance.

More recently, an adviser built a retirement-income portfolio for a relative using the strategy espoused by

Our nation's retirement system is a hot topic. In addition to frequent surveys finding that Americans are ill-prepared and worried about retirement, there are statehouse disputes about whether public pensions are too fat.

There is debate in Washington on how to fix Social Security, and if that is even necessary. And policy wonks, including some in the Treasury Department, are discussing how to tinker with 401(k) plans to make them better.

In the midst of all that talk -- but not, at this point, much action -- it seems worth examining some of the assumptions underlying the debate. It turns out they may not all be true.

Here are a few candidates for "Mythbusters."

Everyone used to have a pension. That is far from the truth. Until pension law changed in 1974, companies used to require decades of vesting for employees; many folks spent 15 or 20 years on the job and were let go just before they vested. So while they technically "had" a pension, they never reaped the rewards. And workers who spend their careers at small businesses or changing jobs every few years were cut out of those fixed-benefit pensions. According to data from the Employee Benefit Research Institute (EBRI), traditional pension benefits may have peaked in 1991, with 37.1 percent of people over the age of 65 receiving income from private or public pensions. In 2009, that figure had fallen only a bit, to 34.5

Much is said of how the recession and continuing economic uncertainty has posed a threat to retirees and those nearing retirement.

Asset levels were hit hard, 401(k) plans are still recovering and low-risk investments produce meager returns. There is a silver lining, however: The economic downturn may make some grand plans more affordable for those entering their "golden years" who are willing to act sooner, not later, to take full advantage of deals and incentives before a full economic recovery takes hold.

Buy a Vacation Home

Many retirement dreams focus on a winter retreat to a warm-climate vacation home or condo. The upside to the downturn is that bargains abound on this front. If you thought your financial situation couldn't handle a second residence, now might be the time to take another look.

According to Stan Humphries, chief economist for Zillow, an online real estate marketplace, retirees and second-homebuyers , along with investors and speculators, are among the first groups to get back into depressed housing markets.

Retirees and those seeking a vacation home typically plan to hold onto the property for 10 years or more

Knowing which accounts to raid first can stretch your savings.

The first wave of baby-boomers turns 65 this year, and that means millions of new retirees will begin to switch from accumulating a nest egg to tapping it. If you're a boomer, it's time to start thinking about how you'll convert decades of savings into a lifetime stream of income and to consider which accounts to tap first. Different sources of income have different tax consequences. Withdrawing funds in the most tax-efficient way will not only minimize your tax bill but could also make your savings last longer.

Generally, if you benefited from a tax deduction for contributing to an IRA or 401(k), every dollar you withdraw later will be taxed at your ordinary income-tax rate -- currently as high as 35%. Each year, you'll receive a Form 1099-R from your account custodian that documents the taxable distributions to report on your tax return.

If you took a pass on the upfront deduction by contributing or converting funds to a Roth IRA, you'll enjoy some tax-free income in retirement. Your annual Form 1099-R will note that you received a distribution from a Roth account, but it won't specify whether any of the money is taxable (you'll have to calculate that yourself on Form 8606, available at www.irs.gov). You may withdraw Roth IRA funds, up to

If you plan to live out your retirement years in your own home, adding universal design features will make aging in place safer and more comfortable. And if you should later sell the house, you'll find that buyers appreciate how these upgrades anticipate their future needs.

Unlike home improvements designed to make an immediate impression, universal design additions with the most sales appeal are those that go unnoticed until you point them out.

"The beauty of universal design is when you're able to incorporate something that looks great and doesn't jump out at you," says Paul Sullivan, a remodeling contractor in Newton, Mass.

In other words, says Armand Christopher, a Realtor who is designated a Seniors Real Estate Specialist: "You don't put in hospital-grade grab bars in a bathroom when you are remodeling."

Fortunately, you don't have to settle for the institutional look. From ergonomically designed faucet handles to skid-free flooring, today's universal design products are stylish and subtle. Financing options include home equity loans and reverse mortgages.

The best time to add aging-in-place upgrades to your home is before you need them, says Pat Rowen, an interior designer and Certified Aging in Place Specialist in Hillsdale, Mich. Rowen had to tackle a rush job

Elizabeth Kinkel, a 27-year-old architect in Washington, D.C., let her 401(k) with her former company languish after she was laid off in 2009. "I forgot about it," she says. By the time she pulled her money out of the 401(k) and reinvested it in a Roth IRA, her $6,000 had lost about $1,500 in value.

Kinkel isn't alone. Due to layoffs and job changes, many individuals have left several unattended retirement accounts scattered in their professional wake. Regardless of what often keeps people from taking action -- procrastination, indecision or confusion -- it's important to consolidate retirement accounts.

"Having multiple employer plans makes for difficult reporting and understanding how your portfolio is allocated," says Phillip C. Lee, a fee-only certified wealth manager at Modera Wealth Management. It also makes estate planning much more complicated. "It is far easier to change the beneficiary of one [Individual Retirement Account] compared to six former employee retirement accounts," says Lee.

It isn't difficult to consolidate and roll over retirement accounts. In fact, the process itself has been streamlined, and at many companies today, you can do it entirely online, says Taren Coleman of Coleman

Few would argue that we have a retirement crisis in America. What people might debate is how we solve the problem.

Slowly but surely, however, researchers are producing work that offers much-needed insight into how we can reduce the severity of the problem. Case in point: A working paper just published by the National Bureau of Economic Research, on two explanations for why consumers have trouble with financial decisions.

"One is that people are financially illiterate since they lack understanding of simple economic concepts and cannot carry out computations, such as computing compound interest, which could cause them to make suboptimal financial decisions," wrote Olivia Mitchell, the director of the Pension Research Council, and Justine Hastings, an economics professor at Yale University, in their paper, "How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors."

"A second is that impatience or present-bias might explain suboptimal financial decisions. That is, some people persistently choose immediate gratification instead of taking advantage of larger long-term

If you spend too much of your 401(k) account balance early on in retirement, you will reach your later years with very limited resources. But there are steps you can take to make your retirement account balance last longer. Here are some strategies to make sure your retirement savings lasts the rest of your life.

Postpone Withdrawals

Most retirement savers aren't dipping into their nest egg immediately upon retirement. In fact, most investors don't even touch their 401(k) savings until they are required to. Only 18 percent of households with retirement accounts make any withdrawals in a typical year between ages 60 and 69, according to a recent National Bureau of Economic Research (NBER) study of IRA, Keogh, 401(k), and Thrift Plan account holders between 1997 and 2005. The proportion of households making a retirement account withdrawal grows slowly from about 10 percent at age 60 to 23 percent at age 69. Delaying 401(k) withdrawals early in your retirement gives you additional time to build up more tax-deferred growth.

Avoid Tax Penalties

After decades of delaying taxes, retirees age 70 1/2 and older are required to take distributions from traditional retirement accounts and pay any resulting income tax. (Seniors who are still working and not at

Everyone knows the secret to investment success is to buy low and sell high. The problem is most of us lack clairvoyance.

We weigh in on some of the most common mistakes investors make, and while it's easy to see that chasing hot stocks -- the most frequently cited mistake -- would be an exercise in futility, there are other pitfalls to watch out for on the road to retirement.

There are never any guarantees when investing, but avoiding these seven missteps will better your chances of success.

Mismatching Investment With Goal

Need that money for retirement in the next couple years? Don't put it in a hot emerging-markets fund.

Consider when you'll need access to your money. This will help you avoid unnecessary transaction fees, penalties and risk.

For some goals, such as paying for college, it may make sense to use a mix of investments, says Gail MarksJarvis, author of "Saving for Retirement (Without Living Like a Pauper or Winning the Lottery)."

"If you are saving for college and your child is within three years of going to college, you've still got seven years until that last year of college," she says.

So while the bulk of short-term college savings should probably be very safe in CDs or short-term bonds or

Starting in 2010, anyone can convert a traditional Individual Retirement Account to a Roth I.R.A. That’s great news for people who previously were shut out of a Roth because their adjusted gross income was more than $100,000.

Especially if you want to leave retirement assets to family or friends, a Roth conversion is one of the simplest, best planning tools available. You avoid the requirement to take yearly minimum distributions starting at age 70 1/2, and that can leave more for beneficiaries if you don’t use the money yourself. And subject to certain restrictions, no tax is assessed when the money is withdrawn, so income can compound tax-free.

But this technique has a hefty price tag. You owe income tax on the amount you convert, which can be the entire account balance or part of it. And some people worry about what might happen years from now if Congress eliminates the Roth.

One possibility is that those who have already converted will have their gains untaxed, said Christopher R. Hoyt, a professor at University of Missouri-Kansas City School of Law. Another is that only the investment earnings — not the amount converted — will then be taxable.

For now, many lawyers and financial advisers have put that thought aside and are strongly recommending Roth conversions to clients who can afford to pay the income tax. Yet this advice can be hard medicine to take, for it goes against the conventional wisdom that one shouldn’t pay a penny of tax sooner than necessary, and the idea of writing large checks to the Internal Revenue Service for an uncertain future

While many Americans have valid reasons for raiding their 401(k) during their working years, these early withdrawals can have dire consequences in retirement. Fees and penalties for early distributions can further eat away at your retirement account balance. About 15 percent of 401(k) participants spend some of their nest egg before they’re ready to leave the workforce, according to new Government Accountability Office report. The study identifies 3 major ways money leaks out of 401(k)s before retirement and how much each one affects your financial security.

Cashouts

When you leave your job you are given an opportunity to cash out your 401(k). American workers took about $74 billion from their retirement accounts when they job hopped in 2006. But when you cash out a 401(k), typically 20 percent of your account balance is withheld by your employer to pay for federal and state income taxes now due on the amount withdrawn and account holders under age 59.5 must also pay a 10 percent early withdrawal penalty.

401(k) participants who voluntarily cashed out their entire account balance at the time of job separation experienced a larger reduction in their retirement savings over their career than any other type of 401(k) withdrawal, GAO found. For example, a 401(k) participant born in 1970 who began saving 6 percent of his pay annually for retirement at age 21 plus a 3 percent employer match would typically accumulate $588,049 by age 65, according to GAO calculations. But if that same participant cashed out his nest egg at age 35 when he changed careers and paid the resulting tax penalties, he would have only $404,431 at retirement age. And that’s assuming he immediately gets a new job and saves the same amount with an

When you retired, you made the transition from being on a company's payroll to paying yourself with your retirement savings. If you were one of many retirees forced back into a job during the recession, don't despair. You survived the work-retirement transition and you can do it again. We provide six tips to help you make the adjustment.

1. Adjust Financial Objectives

Before retiring, you were accumulating and saving in anticipation of a future life of leisure. During retirement you were preserving and spending. If you're going back to work, your income needs may determine whether you need to continue preserving and spending or if you have enough extra money to go back to accumulating and saving.

Your choices for saving change if you're over 72.5 because of the age limits for contributing to your traditional IRA and some annuities. Instead, make contributions to a Roth, which doesn't have an age limit, but does have income limits. For younger workers who retired early, take advantage of your new employer's retirement plan.

2. Check Your Social Security Status

If you are receiving social security benefits and had to go back to work, whether or not your benefits will change depends on your age when you started receiving benefits. In some instances more of your benefits may be taxable due to the additional income. On the positive side, your social security benefits may be recalculated to reflect the additional years of work and could result in a bigger check. Consult the

Should you hold off on saving until your nonmortgage debt is paid off?

Simple math suggests it's better to get rid of debt before saving for retirement or an emergency fund. After all, if the savings rate is 1 percent and you have credit card debt at 14 percent interest, money is better spent paying down debt quickly.

But personal finance decisions are rarely so simple, and this method may not be the right choice for everybody.

"Like everything else in life, this decision is one of balance, not of absolutes," says Michael Rubin, president of Portsmouth, N.H.-based Total Candor, a provider of financial education.

Dean Barber agrees. The host of nationally syndicated talk radio program "America's Wealth Management Show" says there are pros and cons to each approach.

"You have to set your priorities ... and understand the consequences to either paying debt first or saving money first," says Barber, who is also president of the Barber Financial Group of Lenexa, Kan.

So which should come first -- paying off debt, or saving?

Paying Debt Before Saving

The notion of saving before paying high-interest debt is hard for some financial advisers to swallow, given