Q My wife recently turned 62 and we've been pondering retirement. We each qualify for modest pensions at our respective workplaces, plus we've managed to save about $400,000, not including equity in our nearly paid-for home. However, we will have at least one of our two adult children in college for another year or two; plus we're assuming primary responsibility for portions of their tuition-loan debt. We'd like to retire while we're still able to lead active lives away from our professions. How should we proceed?


A When it comes to planning for retirement, my main recommendation is to first put down the 401(k) statements, and other pieces of financial information and ask yourself, "What is it you want out of the next stage of life?"

"Start with what you want to do," said Joel Larsen, a certified financial planner with Navion Financial Advisors in Davis, Calif. "And then focus on what you have to work with."

There are a lot of issues to consider but I want to highlight one of the most important: work. Specifically, many people aren't really retiring these days, at least not in the traditional sense of the word. Yes, they're saying goodbye to their employer for the last time or selling the business if they're an entrepreneur. Yet they're continuing to work, usually part time. The advantages of the "work-some-during-retirement" movement is that it allows your savings to compound longer. It also delays when you start taking Social Security benefits. The Social Security payout rises by 8 percent a year for every year of delay after age 62 and before age 70.

The new retirement money management rules are work longer, save more, live frugally (not cheaply) and delay applying for Social Security. These insights have been building over the years, but they got a widespread hearing following the credit crunch, bear market and recession.

I like that you're eager for a change while your health is good. A good place to begin the transition process is reading "The Big Shift: Navigating the New Stage Beyond Midlife," by Marc Freedman. He's the founder of Civic Ventures (www.civicventures.org), a San Francisco-based nonprofit. The book is addressed to people like you and your wife. "Never before have so many people had so much experience and the time and the capacity to do something significant with it," he writes.

Chris Farrell is economics editor for "Marketplace Money." Send your questions to cfarrell@mpr.org.