When you’re busy building a career or raising a family, retirement can feel light years away. But it tends to approach faster than we expect. The good news is, the earlier you start planning, the more freedom and choices you’ll have later on.
A wise person once said, “You are never too old to set another goal or to dream a new dream,” and that’s a great way to think about retirement. Of course you want to plan strategically for your financial future, but you should also consider other important factors like how you’ll nurture your health, shape daily habits, and maintain purpose beyond your working years, too.
This post is designed to give you a simple framework to think holistically about retirement planning – whether your last day of work is a decade from now, 5 years away, or happening next year. We’ll show you how each stage provides opportunities to intentionally create the retirement you want.
We’ll unpack the key points from this video below in more detail.
10 years out: Build your foundation
Ten years may sound like a long time, but it’s the perfect window to create financial flexibility and freedom for your future. The small, consistent changes you make over a decade can really stack up. Think of this phase as your opportunity to design the foundation your future self will be grateful for! Here are the top 8 things to do in this season:
- Take a wide view. Take stock of your current finances by reviewing your statements, pensions, and any other accounts or holdings. Understand what you have, what it’s worth, and how much you’ll need to retire comfortably.
- Talk it through. Once you know what it will take to retire, get granular with your partner about retirement timelines, and what you’ll need for housing, whether you’ll age-in-place, downsize, or complete any renovations to make your space serve you better. This is a great time to get on the same page.
- Be intentional about your peak earnings years. The final 10-15 years of your career often represent your highest earning and savings potential. Smart planning during this window can dramatically change what’s possible later.
- Maximize your retirement contributions. While you still have steady income and time on your side, make the most of 401(ks)s, IRAs, and catch-up contributions. Consider the balance of Roth, pre-tax, and after-tax funds for flexibility later.
- Start building tax flexibility. This is an important time to be intentional about how your savings are split between pre-tax, Roth, and taxable accounts. The mix you build now will have a big impact on how much control you’ll have over taxes in retirement.
- Strategically reduce debt. Focus on paying off high-interest debt first. Fewer financial obligations mean greater freedom and margin later.
- Map out your ideal lifestyle. How do you want to spend your retirement? More time with family? Traveling? Opening a small business? Run some projections to see how these choices will affect your savings goals.
- Invest in your health. Preventative care and healthy habits now will pay dividends later – not just financially, but in the quality of your life.
5 years out: Get focused and fine-tune your plan
Five years out from retirement is a great time to shift your focus from building to preparing and fine-tuning your plan. You’re close enough to see the finish line, but still far enough away to observe how market changes, inflation, or health costs could impact your plans. This season is about shoring up what you’ve built and ensuring your plan is prepared to weather life’s changes. Here are nine tasks to consider:
- Revisit your projections with fresh eyes. Are you still on track with the plans you made 5 years ago? Do they still make sense? Do your investments and risk level match? If not, make adjustments to your spending, saving, or investment strategies.
- Develop a forward-looking tax strategy. The years around retirement often create important tax planning opportunities. This is a good time to look ahead at future tax brackets, consider strategies like Roth conversions, and think about reducing lifetime taxes, not just next year’s taxes.
- Seek out help. Once you’ve taken a critical look at your overall picture, seek out an experienced advisor like Flynn Wealth Partners who can stress-test your plan for inflation, market volatility, and longevity.
- Rebalance your investments. Make sure your portfolio aligns with your risk tolerance and tax strategy. This might be a time to adjust how your investments are allocated based on how and when the money will actually be used in retirement.
- Start building your retirement runway. It can be helpful to set aside a portion of near-term spending in more stable assets so you’re not relying on selling long-term investments to fund your first years of retirement.
- Plan for healthcare. Review your insurance options, including long-term medical care. If you’re retiring before age 65, you’ll need to bridge the gap until you reach Medicare eligibility.
- Update your estate plan. Review your will, beneficiaries, and power of attorney. Your children or trusted contacts may now be ready for new roles. Ensure your charitable giving aligns with your values.
- Test-drive your budget. It’s one thing to plan a new budget, it’s another thing to live on it! Try out living on your projected retirement income for a few months to see how it feels, then adjust as needed.
- Explore your next chapter. Begin building routines or hobbies outside of work that could help give structure and meaning to your life.
1 year out: Move from planning to living
As retirement nears, it’s time to bring your plan to life. This is where your careful preparation pays off, turning all those “someday” plans into reality. Bring the journey home with these 5 considerations:
- Understand your income strategy. Make sure you know which accounts or “pockets” you’ll draw from first, and how the money will actually show up in your checking account.
- Coordinate the details with HR. Confirm your retirement date, benefits, and any paperwork or timelines so there are no surprises.
- Review your Social Security and insurance. Make sure your claiming strategy is clear and your health coverage is lined up. This is also a good time to look at the financial impact of working one additional year and see what kind of difference that could make.
- Think about what your retirement days will actually look like. Retirement is a big lifestyle shift. Be intentional about staying active, connected, and engaged through volunteering, learning, or mentoring.
- Plan major transitions early. If you’ll be moving, downsizing, or renovating, don’t put it off. It may be easier to tackle these changes before you officially retire and take pressure off the transition later.
What if I didn’t prepare?
If reading this post has revealed some gaps in your planning, don’t panic. You’re not alone, and it’s more common than you might think. It may simply mean adjusting expectations or making a few tradeoffs, but in almost every case there are still good options.
A good next step is to talk with a financial advisor who can help you:
- Get clear on where you are today.
- Talk through your goals and whether there are ways to catch up, like saving more or working a little longer.
- Put together a realistic plan for the next few years.
Don’t let stress or embarrassment keep you from moving forward. Even a single year or two of focused, intentional planning can make a meaningful difference. You don’t have to figure it out on your own.
Retirement is the start of a new season of life, not just the end of a career. The more thought you put into it ahead of time, the fewer surprises you’re likely to face and the more flexibility you’ll have to focus on what matters most to you. If you’d like help thinking this through, you can schedule a call, and we’ll start with a simple conversation.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
Investing includes risks, including fluctuating prices and loss of principal. No strategy assures success or protects against loss.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.