One way to make an event stressful: head into it unprepared. If you’re within five years of retirement, don’t procrastinate. Take the following five retirement planning steps as soon as possible.rn5 Short Term Retirement Planning Stepsrn1. Increase Cash ReservesrnrnApplying for pensions and social security, as well as setting up withdrawals from IRA’s and 401(k) plans, takes time. Retirement planning means expect a glitch or two along the way. Prepare for delays by having extra money tucked away in safe investments; things like savings, checking and money market accounts.rn2. Estimate How Much Money You Need To RetirernrnDevelop an accurate estimate of the amount of money you spend, and the amount of income you will have each month. Although boring, this is the most important retirement planning step you can take.rnrnHere's how to do it:rnrnTake out a yellow pad and write down the following: your current take- home pay and your current monthly expenses. Don’t forget about variable costs like recreation, home improvements and vehicle repairs.rnrnThen write down the monthly income that will be available from pensions, social security and IRA/401(k) withdrawals. Is this number close to your current take home pay? If not, you have four choices: spend less in retirement, save more now, work a few extra years, or earn a higher rate of return on your investments.

3. Evaluate Tax ConsequencesrnrnWill you be in a lower tax bracket in a few years? Then be sure to maximize tax deductible contributions now.rnrnAre you thinking about moving? You may be able to receive $500,000($250,000 if single) of capital gains from the sale of your primary residence tax free(subject to applicable IRS regulations).rnrnDo you have company stock that needs to be diversified? Plan for the amount of tax that will be owed the year you sell the stock, or spread the sale over several calendar years.rn4. Diversify Your InvestmentsrnrnWatching your portfolio go up and then back down again is never enjoyable, but in the end, as long as you end up with a big enough pot of money, it doesn’t really matter how you got there.rnrnOnce you are retired, however, it’s a different story. When you are taking regular withdrawals from a portfolio, volatility has a much greater impact. Reducing the up’s and down’s can significantly increase the odds that your money will last through your life expectancy.rnrnSpend time figuring out what mix of investments will achieve the rate of return you need while having a level or risk that is reasonable for you. The risk/return characteristics of your portfolio will determine how much income you will have, and how long it will last.rn5. Educate YourselfrnrnAlthough it is advisable to seek professional guidance, the truth is no one will ever care about your money as much as you do. Take the time to learn about retirement planning and investing.rnrnSome suggestions: attend an investment class at the local community college, take an online investment class, read a book – or two or three, and use the internet to learn. You spent a significant amount of your life earning this money; now it’s time to learn how it will earn for you.