With people living longer one of the biggest worries for soon-to-be-retired folks is how to make their savings stretch out for the long-haul.

Younger retirees, those under 80, tend to go through more money as they can be more active and want to travel whereas those over 80 might face more health-related costs.

Independent financial adviser Simon Hassan of Hassan and Associates in Auckland says it's a mistake to think of average life expectancy at the limit of where your money needs to stretch to.

"Because it's the average there's a 50 per cent chance you will still be alive after that.

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"Life expectancy is not the right target."

He typically plans for a woman to live to 100 and a man to 95 years old but says spending and investment plans should be reviewed regularly to ensure the nest-egg lasts and reflects the health and needs of the retirees.

nzherald.co.nz spoke to three financial advisers to find out ways to ensure you don't outlive your savings.

Work longer

Vicki Watson, an adviser with Diversified Investments, says continuing to work beyond 65 is an option many people are taking up to make their savings stretch.

"I think it is a personal choice. Some do it for social reasons. Others use that as the excuse but it's for economics as well."

Money Max's Liz Koh says working beyond 65 should allow people to save either what they get in New Zealand Superannuation or from their work.

"If you can keep working until you are 70, and a lot of people do that now, it can make a big difference."

Koh says fewer people are working until a finite date, choosing instead to wind down slowly.

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Some don't know they can claim NZ Super while still working.

They have to pay secondary tax on the money earned but it isn't means tested and is universally available for all over 65s.

Rein in spending

Koh recommends people try and live off the equivalent of NZ Super before they retire so they can adjust their spending before facing a big drop - this can be a particularly big challenge if they are on a high salary.

She describes the final few years before retirement as a marathon effort.

"The approach to retirement is a bit like running a marathon, you've got to run like heck. You've got to save as much as you can for the last few years rather than try and live it up."

Watson says she likes to ask people heading into their last few years before retirement how much they would ideally like to live off once they quit working.

Then she can talk about whether they will need to replace appliances, how often they would like a new car or go on an overseas holiday.

Once that is factored in many become more realistic about how much they can afford to live off.

Think about where you will live

Hassan says many people consider downsizing their homes to release capital for retirement but they could also take on a border, tenant or flatmate to help with the costs.

Moving into a retirement village could also be an option to save money through down-sizing, not paying rates, or as much insurance although the move comes with other costs such as a weekly fee.

Watson says a lot more of her clients are choosing to move into retirement villages than in the past.

"In the past people said they wanted to stay in their own homes as long as possible."

But retirement villages were being seen as more attractive for their social factors and for security reasons. However some people did not like them because they only provide a right-to-occupy licence, not property ownership.

"New Zealand has to look at that ownership structure because it is not attractive to everyone."

Splitting your savings

Koh recommends people take a three-stage approach to their retirement saving - dividing the money to match the different life stages of retirement.

For the first 10 years she says people usually go through a "live-it-up stage" where they want to do overseas travel or join the golf club.

She suggests this phase is funded out of money left on term deposit.

Then the next 10 years may be about the "fix-it-up" phase. Whether that is fixing up the house, replacing the car or needing a hip replacement.

The last phase is winding down into care where people might need to move into a retirement village or rest home.

For money that is not needed in the first 10 years she suggests people set it aside in something that will grow - like leaving it in KiwiSaver or another diversified investment.

Otherwise leaving it in the bank is likely to mean the money is eaten away by inflation and tax. Some of that money might go untouched for 20 years depending on how long you live.

For the first 10 years people should use up the income and capital from the money in the bank. She says people should not be afraid of using up their capital.

Taking a reverse mortgage

Another option is to take out a reverse mortgage where lenders will pay out a lump sum or regular payments based on the equity in your property.

No repayments are made but the lender charges interest on the loan. The money typically gets paid back when the person sells up or vacates the property upon death.

Watson says she sees this as a last resort as there are many things which can go wrong. "They do have risks."

One of those risks is that the provider may go out of business or withdraw the mortgage, leaving retirees scrambling to find an alternative. The loans have also received criticism because people may not fully understand them and the debt can rack up quickly because of the compounding interest.