Rehearse for retirement before ending your career

In a sense, you can. Financially and mentally, you can "rehearse" for the third act of your life while still enjoying the second.

Pretend you are retired for a month or two. Take two steps to act out your rehearsal — one having to do with your budget, the other with your expectations.

Draw up a retirement budget and live on it for one, two, or three months. Make a list of essential expenses — groceries, gas, utilities, mortgage, medicines — and then a list of discretionary expenses, such as movie tickets, dinners out, spa treatments.

This may reveal that you can live handily on less than what you currently spend each month.

Next, list your income sources for retirement. They might include Social Security benefits — depending on when you want to claim them — retirement plans, pension checks, dividends, freelance or consulting payments or other revenue streams.

Investment income is also in the mix here, so check with a financial professional to determine a withdrawal rate from those accounts that you can safely maintain through your retirement. It might differ slightly from the long-recommended 4 percent.

When you have your list, stack the projected total income up against your essential expenses and see how much you have left over.

Try living off of that level of monthly income for a month or more while you are still working. If it covers your necessary monthly expenses and not much else, then some adjustments in your retirement strategy might be needed — a housing change, a change in your retirement date.

See how it feels to retire. Before you conclude your career, try to arrange some "previews" of your retirement lifestyle.

If you want to serve your community, volunteer avidly for a month or two to get a taste of what daily volunteer work is like. If you see yourself traveling enthusiastically at the start of retirement, take a dream vacation or even a couple of consecutive trips if your schedule allows to see how they truly fit into your financial picture

Your "rehearsal" need not be last-minute. If you think you will retire at 65, you could try doing this at 63, 60 or even before then. The earlier your attempt, the more time you have to alter your retirement strategy if needed.

Rehearsing for retirement can be very insightful. Some new retirees leave work abruptly only to have their financial and lifestyle assumptions jarred. As you want to make a smooth retirement transition to a future that corresponds to your expectations, test-driving your retirement before it begins is only wise.

Anthony G. Engrassia provides financial planning and investment advice through Prosperity Capital Advisors, an SEC registered investment advisor.