I have adjusted my clutch following the factory manual. The problem is the handle is almost all the way out when it engages. There doesn't seem to be any slipping but wondered if you guys had any ideas on my next move.

 

Trying to go by memory is a scary thing for me but here goes.
I loosen the cable adjuster located half way down the cable on the left side of the bike under the rubber boot. than, I turn the clutch adjuster inside the derby cover until it seats than back it off slightly. Now I go to the adjuster in the cable & start taking the play out of the lever. once it is getting close, I squeeze the clutch a few times & adjust until there is just a hair of free play. That should give you a good adjustment!
You can also pull the front plate off your clutch pack & dial it up to max. refer to your manual for that one, It's easy!!

 

Did you check/adjust the index plate on the diaphram spring as Hatch mentioned? (per the manual) If not, check that. When all is perfectly adjusted they tend to engage "late" when the friction discs are worn smooth but that's no indication they are worn out. That style clutch will run like that a long time without issues. When they are getting "done" it will most often slip at higher speeds and still hold well in lower gears... like a hard accel in high gear on an interstate ramp and the engine revs but won't go faster.

 

That clutch is particularly sensitive to stack up height. New it should be .885 - .900.

If it doesn't have the proper height, get a new set of steels and frictions from Energy One.

Check the retainer plate for wear. There is a raised ring around the plate that wears down and you can not set the spring flat to slightly con caved. If it is worn, replace it.

You can set more slack in the clutch cable to get and earlier engagement.

 

I owned a 1989 Ultra and put over 120,000 miles. After about 100,000 miles, it started to slip. Especially under hard acceleration. I found that the clutch flex plate had relaxed and I needed a new one. I bought a new Screaming Eagle one and it corrected the problem.