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I’m Exactly 5 Years from Retirement. Here’s My Game Plan to Get Ready.

Five years might sound like a lot, but when it comes to prepping for retirement, it really flies by. Those final years before you clock out for good are make-or-break. I’ve watched people sail through those years smoothly—and others stumble over things they didn’t even realize they needed to figure out. After years in finance, seeing what actually works (and what’s just noise), here’s how I’m tackling my last five years before retirement.

1. Recalculate and Stress-Test My Retirement Goal

It’s easy to get comfy with a target number—$1 million, $2 million, whatever you’ve been aiming for. But too many folks just set it and forget it. Five years out, you want that number to be as close to reality as possible.

I’m rolling up my sleeves and taking a full inventory of my assets—401(k), IRAs, brokerage accounts, everything. Then I’ll update my expected expenses, keeping inflation in mind (which hasn’t been kind lately). I don’t rely on just one retirement calculator either; I run several to see different “what if” scenarios. What if the market tanks next year? What if inflation sticks around longer? It’s not about stressing out—it’s about being ready for whatever comes.

2. Cut Down or Kill High-Interest Debt

Going into retirement carrying high-interest credit card debt or personal loans? That’s stress waiting to happen. I’ve seen how much it can eat away at your monthly budget. Mortgages are trickier—some say pay them off, others say keep investing. For me, I want my monthly bills as low as possible, so getting rid of high-interest debt first is priority number one.

3. Ease Into a More Balanced Portfolio

Everyone says to play it safe as retirement nears, but I’ve seen people swing too far, dumping everything into bonds or cash. Then inflation quietly chips away at their savings. My plan? Gradually shift part of my portfolio toward less risky investments but keep enough in stocks to help my money grow and last.

Finding that sweet spot is personal—it depends on your risk tolerance, health, other income sources, not just age. Since 2020, markets have been wild, so staying flexible is key.

4. Do a Tax Check-Up

Retirement isn’t just about how much you have—it’s about how much you get to keep after Uncle Sam takes his cut. Five years out, I’m teaming up with a CPA to run through my tax situation post-retirement. Should I convert some funds to a Roth now? Delay Social Security? Take advantage of today’s capital gains rates? Those answers depend on your own situation.

Heads up: If your income spikes near retirement—maybe from selling a business—some tax moves can backfire. Timing is everything, and tax rules love to change.

5. Nail Down Your Health Care Plan

Health care can be the wildcard nobody expects. If you retire before 65, Medicare’s not an option yet. COBRA is pricey, and private plans often cost even more. I’ve seen people get blindsided by this.

I’m mapping out my options early—including any retiree coverage from past employers. Some folks find part-time work just for the health benefits makes sense; others lean on the ACA marketplace. There’s no one-size-fits-all answer here.

6. Update Estate Plans and Beneficiaries

Five years out is also about paperwork nobody loves—wills, trusts, and beneficiary updates. You’d be surprised how often outdated info on old 401(k)s or life insurance policies causes headaches. It’s not glamorous, but it’s super important.

7. Start a “Practice Run” Budget

Most people don’t really know what they’ll spend in retirement until they’re living it. So, I’m going to start living on my projected retirement budget at least a year before quitting work. Tracking every dollar helps spot pain points early—better to figure this out now than after I stop working.

8. Plan Your Social Security Moves

When to tap Social Security is a big decision—there’s no “right” answer. I’m running the numbers for starting at 62, 67, and 70. The difference can be huge, especially if you’re married, thanks to spousal and survivor benefits.

I’ve seen folks grab it early out of fear and regret it, or wait too long and miss out. If health is a concern or life expectancy shorter, waiting might not make sense. Sometimes peace of mind beats pure math.

9. Think About the “Soft Stuff”

It’s tempting to focus just on the money, but I’ve noticed the non-financial stuff trips people up more. What will I do every day? How will I find purpose? I’m chatting with retirees I trust and making a list of things I want to do, places to visit, and ways to give back. These questions matter.

10. Watch Out for Sequence of Returns Risk

This one’s easy to miss: if the market tanks early in retirement, it can permanently hurt your savings. To avoid selling at the wrong time, I plan to keep 2-3 years of living expenses in cash or short-term bonds as a buffer.

But if you don’t have a big cushion saved, holding too much cash could actually hold you back. It’s all about balance.

What I’m Steering Clear Of

No market timing or chasing the latest hot investment. I won’t blindly follow the “4% rule”—it’s a good guide but not gospel. And I won’t pretend my plan can handle everything life throws at me. Flexibility wins.

A Few Real Talk Notes

This approach isn’t perfect or one-size-fits-all. If you’re behind on savings, five years might not be enough to catch up. Health issues, family needs, small businesses, or rental properties can change the game completely.

But after seeing so many people’s journeys, I know this: taking action in those final five years makes a huge difference. It’s less about perfection and more about being ready to adapt as life unfolds.

Five years will fly. The good news? It’s enough time to change your story—if you start today.

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