What to Do 5 to 10 Years Before Retirement
The five to ten years leading up to retirement are some of the most important in your financial life. This window offers a valuable opportunity to step back, evaluate where you are today, and begin shaping what you want your life in retirement to look like. Rather than waiting, thoughtful planning during this period can help create a smoother, more confident transition.
Take a Clear Look at the Big Picture
A strong retirement plan begins with understanding your current position. This includes reviewing your debt structure and overall financial obligations whether that means a mortgage, car payments, cost of education, or other ongoing liabilities.
At the same time, it is important to evaluate your retirement savings. Looking at account balances, contribution levels, and how those assets are invested can help determine whether you are on track or if adjustments are needed.
Understand Your Future Income Sources
Retirement planning is not only about what you have saved, but also about the income you can expect in the future. For many individuals, this includes sources such as Social Security or a pension. Understanding when those benefits begin and how much they may provide is a key part of building a reliable income plan. Once those sources are identified, the next step is determining how your retirement accounts will help bridge any remaining gap between your expected income and your desired lifestyle.
Test Your Lifestyle
One of the most effective strategies during this stage is to begin living on your projected retirement budget. This approach allows you to see how your expected income and spending align with your lifestyle goals. By making adjustments early, you can refine your plan while you still have time to make meaningful changes. It also provides clarity around what retirement may feel like on a day to day basis.
Plan for a Smooth Transition
As retirement approaches, it becomes increasingly important to run different scenarios and stress test your plan. This helps account for variables such as market changes, unexpected expenses, or shifts in income. The goal is to create a plan that provides confidence when your paycheck eventually stops. With the right preparation, retirement can feel less like a major shift and more like a natural next step.
Start Early for Greater Flexibility
The earlier you begin preparing within that five to ten year window, the more options you have. Small adjustments made during this time can have a meaningful impact on your long term outcome.
If you are approaching retirement and want to better understand what this next phase could look like, our team is here to guide you through the process and help you build a plan that aligns with your goals.
Advisory services offered through NewEdge Advisors, LLC, a registered investment adviser, doing business as Middlebrook Wealth. Securities offered through NewEdge Securities, LLC, Member FINRA/SIPC. NewEdge Advisors, LLC and NewEdge Securities, LLC are wholly owned subsidiaries of NewEdge Capital Group, LLC. Middlebrook Wealth does not provide tax or legal advice. Therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation.