1. Create a realistic budget. Add up your essential living expenses and match them with your guaranteed sources of income, such as Social Security. If there's a shortfall, you'll have to fill the gap by drawing down your savings or using a chunk of your nest egg to buy an annuity.

2. Strive to pay off your mortgage. Do it before you retire and you'll cut your expenses significantly. But establish a home-equity line of credit first so that you'll have access to credit with tax-deductible interest.

3. Assess your savings and benefits. Get help from a financial planner or 401(k) investment counselor. Or crunch you own numbers at Fidelity Investments' myPlan, T. Rowe Price's retirement calculator or TD Ameritrade's WealthRuler.

4. Figure out how you'll cover health costs. You may have access to retiree health insurance from your former employer, or youo might be left on your own to patch together coverage through Medicare, a supplemental medigap policy and Medicare Part D prescription-drug coverage (www.medicare.gov).

5. Review you insurance needs. If your kids are grown and your house is paid off, you may not need life insurance anymore. But you may want to buy long-term-care insurance to protect against one of the biggest potential threats to a retirement nest egg.

TAKE OUR QUIZ to see how prepared you are for retirement.