Your finances: Pre-retirement planning

Usually, when people talk about someone "going through a stage" they are talking about a 2-year-old or a teen. But there's another age at which people go through a key transitional period, also marked by angst and rebellion: Call it pre-retirement.

It hits for real about five years before an expected retirement date. Here are some guidelines for getting through that phase with a minimum of stress and strain.

Get specific about life planning. This can be the most challenging part of the exercise; the rest is just numbers. What are the activities you really care about? Where do you want to travel and need to travel? What kind of lifestyle do you think you will have?

Do a health care plan. Private health insurance will change over the next few years, regardless of whether the Obama health care reform law is permitted to stand.

You can figure out if you're covered for gaps before Medicare kicks in at 65 and afterward. How is your health? Do you need to be near certain medical facilities? What drugs do you take regularly? Will they be covered under Medicare?

Take inventory of all of your assets. Retirement accounts, savings, company retirement plans, the value of your home and more. How much they will allow you to spend?

Study taxes, too. Learn about the tax properties of those various baskets of money. Which ones will provoke taxable events when you withdraw money? Does your state and municipality offer any property or income tax breaks to retirees? How much could you save on taxes if you moved in retirement?

Get real numbers. Ask your employer and the Social Security Administration exactly how much you have coming to you in retirement benefits at various years.

Organize your debts. It may be OK to go into retirement with debts, especially something like a very low interest rate mortgage. But not if you have to withdraw tax-deferred money to make payments on high interest loans.

Line up your next gig. Do you want to go cold turkey, working full-tilt one day, and be fully retired the next? If not, use the last three or four years before retirement getting ready for the next phase. Take classes, set up a side business or start laying the groundwork for Phase II, so that when retirement comes, you're ready. It also helps to spend money while you are still earning it. Outfit your retirement wood shop or art studio before you stop working; the expenses will be easier to bear.

Start doing lifestyle experiments. If you intend to dramatically change your life in retirement, use your vacations between now and then to live a little. Travel to the places where you expect to spend time. Immerse in weekend activities like the ones you think will take up your days when you're done working. You may even change your mind about retiring, but you'll have fun on the way.