This year, approximately 77 million Americans who were born between 1946 and 1964 - aka Baby Boomers - will turn 65. That means lots of folks have dreams of retirement on their minds. But while those TV commercials make it look worry-free and so appealing - sailing off the island coast or golfing at the country club - making the decision to retire can be a lot more complicated and difficult than the ads would have us believe. Here are several important questions to ask before taking the plunge into retirement.

TUTORIAL: Retirement Planning: Introduction

1. Finances
The most important thing to consider is money. Will you be able to afford life and live your dreams after employment? If you've planned for this moment - either through 401(k) or IRA contributions, pensions or other investments - at least you've given yourself a head start. But have you devised a Plan B in the event of those investments turning sour? Recent history has shown us that the financial markets are volatile, housing is still unstable and the economy is not yet recovered. Even if you can float on tough seas for now, will there be enough for a long-term storm?

State Farm estimates that the average person will need 70-80% of his or her income to maintain their present lifestyle. Sit with a financial planner to review your personal situation. It could mean the difference between cruising cross-country in a vintage convertible and driving yourself deeper into debt. (For related reading, see 9 Things To Know About Retiring In 2011.)

2. Health
The ideal retirement plan includes being healthy enough to enjoy the time. If you haven't already begun an exercise and healthy-living lifestyle, it would be wise to do so sooner rather than later. That means, developing and maintaining a healthy diet and eating habits, making regular visits to your physician or healthcare professional, and adopting an active regimen. Your health is tied not only to your physically well-being but also your financial well-being. Health expenses can add up quickly and will significantly eat into your savings. Hopefully, you will stay so healthy you will you outlive your savings! Preparing for both can mean a healthier and happier you. (For related reading, see Health Insurance: Paying For Pre-Existing Conditions.)

3. Housing
Your children have moved out and the idea of maintaining a big home is not how you'd like to spend your free time. But what are your options? It's a buyer's market right now, so you don't want to rush into a sale. If possible, wait for the right opportunity to get the price that works best for you and your future. If and when you do sell and move to a condo or apartment, will you be able to make the emotional transition to a smaller space after living in a large home? Research "55-and-over" communities, which are designed to meet the needs and lifestyles of an older population. Another consideration in relocation is family. Can you move away from children and grandchildren without feeling that tug? (Learn how to cut your mortgage, tax, gas and utility bills. For more, see Downsize Your Home To Downsize Expenses.)

4. Your Time
You've worked your entire adult life, so you pretty much have a routine: when to rise, when to eat meals, how to manage daily chores, when to go to bed. With retirement, all that regimentation goes out the window. Believe it or not, lots of people have a hard time adjusting to a schedule-free day. Experts say one of the best moves is to stay involved somehow - volunteer, do some consulting, take up a hobby, join a club, take classes at a community school or college, even get a part-time job. In fact, according to the Centers for Disease Control and Prevention, the life expectancy for the average American is almost 78 years, which gives most of us lots of time to keep doing whatever it is we like to do.

TUTORIAL: 403(b) Plan: Introduction

5. Estate Planning and Insurance
Let's face it: none of us wants to think about the inevitable. But it will surely put your mind at ease to know that when you die, your assets will be distributed according to your wishes and no one else's. Speak to your attorney about setting up a will, trusts and custodial accounts for grandchildren and children. This type of planning will not only ensure your wishes, but it will also help save your loved ones and beneficiaries from dealing with estate taxes at the time of your death. Also, consider purchasing insurance policies that cover long-term care issues, which can protect your assets in the event of a health crisis. (For more about estate planning, see 6 Estate Planning Must-Haves.)

The Bottom Line
The decision to retire is one that should be given careful thought. But by answering some very important questions - and being realistic - your dreams truly can come true. (For related reading, see Retirement Saving Tips For 65-Year Olds And Over.)

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