The official page for Redmine upgrade is here. Below I will write down the instructions I use when upgrading to the latest version of Redmine.
Note that I have cloned Mercurial (Hg) repository and am updating by pulling the latest changes.
So, here goes.
rake db:migrate RAILS_ENV=production
bundle install
bundle update
rake redmine:plugins:migrate RAILS_ENV=production
rake tmp:cache:clear
rake tmp:sessions:clear
That's it!