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16 Things to Do If You’re Retiring in the Next 5 Years

May 31st, 2016 | 3 min. read

By Jacob Schroeder

16_Things_to_Do_If_Youre_Retiring_in_the_Next_5_Years-image.jpgIf you plan to retire in the next five years, you may feel excited but also a little uneasy. With your “financial independence day” fast approaching, have you done everything to prepare for retirement?

What you do from now until then can make a big difference in living the retirement you want. Below are 16 steps to take before or during the five years before retirement. They will help you get ready and stay on track.


  1. Obtain your Social Security Statement and seek the counsel of a financial adviser. For many, Social Security will be a primary source of retirement income. When to claim it depends on your specific needs and circumstances. And, if you plan to still work while receiving Social Security, be sure you understand how your benefit may be affected.

  You can access your most recent Social Security Statement on the Social Security Agency’s website here.

  1. Review your benefits from any current or former employers. Are you eligible for any pension or health care benefits? If a pension is available, make sure you understand the different payout options, including whether the payments are adjusted for inflation. Employer-provided pensions can provide another steady income stream.
  2. Obtain current or projected balances from all investment assets. Investment assets include retirement accounts such as 401(k)s, 403(b)s and IRAs. They also include brokerage accounts or company stock option plans. You can convert these assets to cash and use them to augment income from Social Security and any pensions.
  3. Review any insurance products, such as permanent life insurance or annuities, that may provide retirement income through cash balances or income streams.
  4. Determine how to use any investment property you own. Can it be sold to add to your investment portfolio? Or, can it be leveraged as an additional income source such as through rent payments?
  5. Review your portfolio with your adviser and prepare to reduce risk. As you approach retirement, your investment objectives change. Instead of trying to grow your money, you’re now seeking to preserve it to use as income for your retirement needs. Therefore, you may want to reduce the amount of stock in your portfolio and increase your allocation to generally more conservative, income-generating investments such as bonds.


  1. Review your health insurance coverage. Make sure that you have health insurance in place and understand the rules such as deductibles, co-pays and allowed health care provider networks. Health-related costs such as long-term care could make up a large percentage of your retirement expenses.
  2. If you are approaching age 65, make sure to apply for Medicare even if you do not plan to start Social Security until later. You are required to sign up for Medicare at age 65. Failing to do so can result in a penalty.
  3. Determine your estimated retirement living expenses. Since you’re retiring in the next five years, you should have a better picture of your potential expenses. A very simple way to do this is to look at your take-home pay, subtract out any ongoing savings and use the remaining number as a starting point. If your expenses seem too high, you may have to adjust your lifestyle accordingly.
  4. Review your living situation. Your cost of living directly impacts the quality of your retirement. You may want to consider relocating or downsizing your home as a way to reduce expenses and boost your income. You may want to live closer to the people and things you enjoy most.


  1. Choose a retirement career or new business. What do you plan to do with all your time in retirement? Many retirees start a new career or launch a new business as a way to stay active and keep a sense of purpose.
  2. Develop an active lifestyle. Physical fitness can provide several benefits later in life. You increase your chances of maintaining strong mental functions, mobility and overall health. Additionally, it can help you reduce your health-care expenses.


(Please make sure to seek legal advice):

  1. Make sure the proper beneficiaries are in place for your retirement accounts. For example, a common mistake remarried couples make is leaving an ex-spouse listed as a beneficiary on an old pension account.
  2. If you have created any Living Trusts, be sure they are funded.
  3. Update any wills or trust documents.
  4. Put in place the appropriate medical and durable power of attorney documents. This helps ensure that your specific wishes are fulfilled in the event anything happens to you.


There are many steps to take in the five years before retirement. It can be difficult making the right choices among a changing retirement landscape. Educating yourself about how your finances can be managed is one solution for reaching the retirement you desire.

  • Take our 10 Step Dream Questionnaire to help you start planning your future.  
  • Speak with an Advance Capital adviser who can help you complete all of these steps and determine if any additional steps may be required. Fill out the contact form here or call 800-345-4783.