Just as every season brings change to nature, the year before retirement is a “shoulder season”—part excitement, part uncertainty, and a lot of details that matter more than most people expect. The good news: a focused, calm checklist can turn that nervous energy into confidence.
1) Stress-test your retirement paycheck (before you need it)
It’s one thing to estimate spending; it’s another to rehearse it. Revisit your planned monthly income sources—Social Security, pensions, portfolio withdrawals, part-time work—and compare them to real expenses.
Try this: Run a “retirement practice month” where you live on the income you expect in retirement and set aside the difference. It’s a revealing exercise—like a dress rehearsal, but with fewer uncomfortable shoes.
2) Decide how you’ll cover the first 1–3 years of spending
Early retirement is when sequence-of-returns risk can matter most—poor markets early on can put pressure on a long-term plan.
Consider: Keeping a sensible cash reserve or short-term bond allocation for near-term spending, so you’re not forced to sell long-term investments at an inopportune time. The goal isn’t to predict the market—it’s to plan so you don’t have to.
3) Get precise about healthcare (and build it into the plan)
Healthcare is one of the most common “surprises” in retirement—especially if Medicare timing, employer coverage, COBRA, or a marketplace plan is involved.
Action steps:
- Confirm when Medicare eligibility begins and what you need to enroll
- Estimate premiums, deductibles, and out-of-pocket costs
- Review HSA rules and how an HSA can fit into retirement spending
4) Map your tax picture now—before income changes
Retirement often reshuffles your tax return: wages may drop, but Social Security, IRA withdrawals, capital gains, or Required Minimum Distributions later on can change the story.
Planning angles to discuss:
- Timing of Social Security and how benefits may be taxed
- Whether partial Roth conversions might be appropriate for your situation
- Review withholding/estimated payments to avoid surprises
5) Align your accounts—and your paperwork—with your new season
The year before retirement is the perfect time for the “quiet” work that prevents headaches later.
Checklist:
- Confirm beneficiaries on retirement accounts and insurance
- Review estate documents (will, powers of attorney, healthcare directives)
- Consolidate old accounts where appropriate for simpler management
- Revisit your investment risk level so it matches your timeline and comfort
A steady closing thought
Retirement planning isn’t about finding the perfect forecast. It’s about building a plan that can bend without breaking—so you can enjoy the next chapter with perspective, patience, and a little more peace of mind.