Q. I am 51 years old. I have some money in my 401K and IRAs (about $300,000) plus another $100,000 in savings.  My question is where do I start?  What should I be doing now to prepare for retirement?

---J. T., by email from Houston, TX

A. Retirement isn’t just about investments. It’s a bit like having two railroad tracks meet in the middle of nowhere. The hard part is lining up your retirement income resources with your retirement spending. If the two are “on track,” you’ll have a comfortable retirement. If your spending regularly exceeds the capacity of your retirement resources, you’ll have an anxious retirement.

So here is a short checklist of what you can be doing over the next 11 to 16 years:

• Pay attention to your Social Security statement. If you’re like most people, your benefits will be an important part of your retirement income. Get familiar with the Social Security Website. Use its online calculators if you are thinking of retiring early, or late, to estimate your future benefits.
• Get serious about paying off any debt you have. For most people, debt is a major danger in retirement. It may also cause you to pay higher taxes because most of your income will be taxable withdrawals from qualified plans.
• Get meticulous about your spending habits. This means using software like Quicken or Microsoft Money to track where and how you spend your money. Start estimating whether your anticipated future spending will be covered by your anticipated retirement income.
• Start researching alternatives to your current living arrangements if you imagine major changes in retirement. If you dream of retiring to Mexico, Costa Rica, or Panama, start visiting and learning. If you dream of living in another state, start vacationing there. This will help you avoid a future disappointment if it isn’t what you hope--- or it will make you fully prepared when you actually make the change.
• If you aren’t already, start taking your health and “personal maintenance” very seriously. Your health, or lack of it, is the biggest monkey wrench that can be thrown into any careful plan.
  

Note that NONE of this requires you to be an investment expert. All of it offers powerful leverage on your retirement.  

It would also help to research your retirement investment funds and move to low-cost, index-oriented investments. This has a higher probability of providing adequate returns than the expense and risk of selecting managers.

Q. My husband and I plan to retire in five years.  We’re both 58.  My retirement plan is a defined-benefit plan that offers two options for the surviving spouse.  One option (joint and 50 percent survivor) will pay my husband 50 percent of the retirement amount that I receive.  The other option (joint and 100 percent) will pay my husband the same amount I receive.  However, under the joint 100 percent option, my benefit amount will be reduced in order for him to be paid the same amount.  I need to determine which option would be best for us.

    My husband has a railroad pension; we both have 401(k) s currently valued at over $100,000 each. We also have two annuities valued at $5,000 each. We will have another 16 years on our mortgage at retirement and credit card debt of less than $5,000.  Any suggestions on which retirement option to take?
 
---E.T., by email from Dallas

A. Unless you have a significant health problem that would cause your husband to be likely to outlive you, the better pension choice is the joint and 50 percent option. It will give you both a higher income while you are alive. In the event of your premature death, he would have the 50 percent survivor income plus his own pension, so the total decline in his retirement income would not be great.

Suppose, for instance, that each of you will receive a pension of $25,000 for a combined retirement income of $50,000. If you chose the joint and 50 percent survivor option, your husband would have an income of $37,500. The decline would be only 25 percent. That’s a substantial amount, but it’s probably less than the decline in the cost of living for a single person compared to a couple.

The fly in the ointment here may be your home mortgage. If it is larger than your $200,000 in qualified plans, that’s a bit worrisome. Try to pay it down or increase your plan savings.