If you're getting ready to retire, you don't want to outlive your money. That's why Clark often recommends an immediate payout or lifetime annuity from your insurance company. That allows you to get a check each month for the rest of your life. But if you die early, your heirs won't receive anything. That can be a problem.

Schwab, Fidelity and Vanguard have all come out with their own solutions to this dilemma. Each has fewer management expenses than the insurance company options. Basically, they manage your funds and cut you a check each month, while also allowing you to pass money on to your heirs. But you're not protected against market decline, unlike an insurance company that guarantees you money for your whole life but stiffs your heirs.

Can't we just have the best of both worlds? A smart move might be to use 25% of your money for an immediate payout annuity and put the rest into one of these other plans. There is one difference among the Schwab, Fidelity and Vanguard plans to note. With Schwab and Vanguard, the goal is to preserve the money you put in and allow you to live off the earnings. With Fidelity, you set your plan according to whatever year you expect to die. So don't plan on living longer than that!

Whatever you decide, don't overspend in the early years of your retirement or you'll have to go back to work. Consider it a new part-time job as you approach retirement to research, read and consult a fee-only planner to figure out the best plan.