The five years leading up to retirement are some of the most important in your financial journey. This is the time when decisions about income, taxes, investments, and healthcare begin to take on greater significance. A well-structured retirement readiness checklist five years before you retire can help you evaluate where you stand today and identify areas that may need adjustment.
At The Advisory Group, we guide clients through this phase using the T.O.P. (TAG Optimization Process), helping support each part of their financial plan so it is aligned and working together as retirement approaches.
1. Review Your Retirement Income Plan
One of the first steps in preparing for retirement is understanding how your income will be structured once you stop working. This includes evaluating:
- Social Security timing
- Retirement account balances
- Pension income, if applicable
- Other investment income sources
The goal is to determine whether your projected income aligns with your anticipated expenses. Through the T.O.P. Program, TAG helps clients connect income planning with other key areas like taxes and investments to create a more complete picture.
2. Evaluate Your Investment Allocation
As retirement gets closer, your investment strategy may need to evolve. While growth remains important, preserving what you’ve built and managing risk becomes increasingly relevant.
Consider:
- Whether your current allocation reflects your time horizon
- How market volatility could impact your near-term plans
- Whether your portfolio supports your future income needs
TAG works with clients to evaluate investments within the broader context of their financial plan, rather than viewing them in isolation.
3. Assess Your Tax Strategy
Taxes can have a meaningful impact on retirement income. Reviewing your tax situation now allows you to consider opportunities that may be available before retirement begins.
Key areas to review include:
- The types of accounts you hold (taxable, tax-deferred, tax-free)
- Opportunities for Roth conversions
- How future withdrawals may affect your tax bracket
By incorporating tax planning into the T.O.P. Program, TAG helps clients take a long-term view of how taxes may influence their retirement strategy.
4. Plan for Healthcare and Insurance Needs
Healthcare costs are an important part of retirement planning, and preparing in advance can help you better understand how they fit into your overall strategy.
Five years before retirement is a good time to:
- Review your expected Medicare eligibility timeline
- Consider supplemental coverage needs
- Evaluate potential long-term care considerations
Integrating healthcare planning into your financial strategy helps support these costs alongside income and investment decisions.
5. Review Your Savings and Contribution Strategy
If you’re still working, the final years before retirement can be an opportunity to strengthen your savings.
You may want to consider:
- Increasing retirement contributions if possible
- Taking advantage of catch-up contributions
- Reviewing employer-sponsored plan options
Even small adjustments during this period can influence your overall retirement readiness.
6. Revisit Your Retirement Goals
Your vision for retirement may have evolved over time. This is a good opportunity to revisit your goals and confirm your plan reflects what you want your retirement to look like.
Ask yourself:
- What kind of lifestyle do I want?
- Will my spending change over time?
- Are there major expenses I should prepare for?
Through the T.O.P. Program, TAG helps align these personal goals with the financial strategies needed to support them.
7. Update Your Estate and Beneficiary Designations
As you approach retirement, it’s important to review how your assets are structured for the future.
This includes:
- Updating beneficiary designations
- Reviewing wills and trusts
- Keeping your legacy goals clearly defined
Coordinating these elements with your broader financial plan helps keep everything aligned.
8. Stress Test Your Plan
Finally, it’s helpful to evaluate how your financial plan might perform under different scenarios, such as:
- Market downturns
- Higher-than-expected healthcare costs
- Changes in income or expenses
Stress testing helps identify potential gaps and provides an opportunity to make adjustments before retirement begins.
Retirement Readiness Checklist: Five Years Before You Retire
Using a retirement readiness checklist five years before you retire can help bring clarity to where you stand and what steps to take next. By reviewing income, investments, taxes, and healthcare together, you can move closer to a more coordinated retirement strategy.
The Advisory Group works with individuals and families to navigate this transition through a comprehensive planning approach. Contact us today to review your plan and explore how it aligns with your retirement goals.
Investment advisory services offered through Alphastar Capital Management, LLC, a SEC-registered investment advisor. SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the advisor has attained a particular level of skill or ability. Fixed insurance products are offered through The Advisory Group, Alphastar Capital Management is not involved in the offer, recommendation, sale or management of commission-based fixed Insurance products. Alphastar Capital Management and The Advisory Group are separate and independent entities. This is for informational purposes only and is not intended as legal, tax or investment advice or a recommendation of any particular security, investment product or investment strategy. Brokerage services are offered through Oakwood Capital Securities, Inc. (OCS), a registered broker-dealer, member of FINRA, SIPC and MSRB. Oakwood Capital Securities, Inc. (OCS) is not affiliated with any other companies mentioned.
