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Five years out from retirement is a big milestone. It’s close enough to feel real—but far enough that you still have time to make meaningful adjustments. Whether your dream is to travel, volunteer, or simply enjoy more time with family, this is the window to align your finances and your lifestyle.
Here’s a practical five-step checklist to help you move from uncertainty to confidence.
1. Clarify Your Retirement Vision
Retirement isn’t just about leaving work—it’s about creating a life you love. Start by asking:
- Where do you want to live? (Downsize, relocate, or stay put)
- How do you want to spend your time? (Travel, hobbies, part-time work)
- Who do you want to spend it with?
- What kind of legacy do you want to leave?
This vision becomes the foundation for your financial plan. Without it, the numbers don’t mean much.
2. Run a Retirement Income Forecast
With five years to go, it’s time to shift from saving to planning how you’ll spend. A retirement income forecast helps you understand:
- How much income you’ll need annually
- Where that income will come from (Social Security, pensions, investments)
- Whether your current savings are on track
Tip: Use conservative assumptions for inflation, market returns, and longevity. If there’s a gap, you still have time to adjust—by saving more, spending less, or delaying retirement.
The goal isn’t perfection, it’s clarity. Knowing your income picture now gives you options and confidence later.
3. Optimize Your Investment Strategy
Five years out is the time to reduce risk without abandoning growth. That might mean:
- Rebalancing your portfolio to lower volatility
- Increasing exposure to income-generating assets (bonds, dividend stocks)
- Reviewing concentrated positions or low-basis stocks
- Considering tax-efficient moves like Roth conversions
You’ll also want to make sure your portfolio aligns with your retirement income needs—especially having enough liquidity for the first few years. Why? Because market downturns early in retirement can have an outsized impact on your plan (known as sequence-of-returns risk). Building a cash buffer and adjusting your allocation now can help protect against that.
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4. Review Key Planning Areas
Retirement planning isn’t just about investments. Now is the time to review:
- Estate documents (wills, trusts, powers of attorney)
- Insurance coverage (life, disability, long-term care)
- Tax strategies (withdrawal sequencing, conversions)
- Healthcare planning (Medicare, supplemental coverage)
Why now? These decisions can significantly impact your financial security and peace of mind—not just today, but for decades to come.
5. Test Drive Your Retirement
One of the best ways to prepare? Practice living your retirement life.
- Try living on your projected retirement budget for a few months
- Take a mini-sabbatical or reduce work hours
- Spend time in the location you plan to retire
This “dress rehearsal” can reveal budgeting challenges, emotional readiness, and gaps in your plan—while you still have time to adjust
The Bottom Line
The five-year mark is your chance to take control, reduce uncertainty, and build confidence. By clarifying your vision, forecasting your income, optimizing your investments, reviewing key planning areas, and test-driving your retirement, you’ll be well on your way to a life by design!
Need Help?
Whether you’re ready to get started today or you’re just exploring your options, talk to an advisor to discuss your next steps.
Disclaimer
The information provided in this article is intended solely for educational purposes. It is designed to offer insights into financial planning and family wealth strategies, aiming to enhance understanding of financial concepts and decision-making. This content should not be interpreted as personalized investment advice or a recommendation for any specific strategy, financial planning approach, or investment product. Financial decisions are deeply personal and should be made considering the individual’s specific circumstances, goals, and risk tolerance. We recommend consulting with a professional financial advisor for personalized advice
