You've worked hard your entire life, and pretty soon, it will be time to enjoy the fruits of your labor. Getting ready for retirement is exciting, but preparation is critical, particularly in the 12 months leading up to retirement.
This is your last chance to get everything in order, address any shortfalls or blind spots, and start transitioning to a new financial mindset. The following tips will ensure you're ready to enjoy your golden years.
Get instant access to hundreds of discounts
Over 50? Join AARP today— because if you’re not a member you could be missing out on huge perks like discounts on travel, dining, and even prescriptions.
Get 25% off membership — just $15 for your first year with auto-renewal — and a free gift if you join today.
Update estate planning documents
/images/2025/06/17/information-about-estate-planning.jpg)
You should review your estate plan every 3 to 5 years. Still, one more review before retirement doesn't hurt. Ensure your beneficiaries are current, review all estate documents, and address any long-term care plans that you might not have included when you started the process with your attorney.
Outdated or incorrect information can create significant hardship and confusion for you and your loved ones.
Review insurance policies
/images/2025/06/03/calculator-and-pen-on-the-table.jpg)
Assess your life, home, and umbrella insurance coverage. Ensure that your policies still suit your needs. This can greatly reduce unnecessary costs. For instance, you might find that you don't need as much life insurance at this point.
Review your current needs so that you're not wasting money in your golden years.
Build a cash reserve
/images/2024/05/07/counting-us-dollar-bills.jpg)
One of the most common pieces of financial advice is to have an emergency fund. This becomes particularly important before retirement since employment income will soon end.
Keep at least 6 to 9 months of expenses in cash or in a high-yield savings account. This will be your first line of defense against unexpected bills.
Get a protection plan on all your appliances
Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.
Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.
For a limited time, you can get your first month free with a Single Payment home warranty plan.
Reduce monthly fixed expenses
/images/2025/07/16/unrecognizable-woman-holds-receipts.jpg)
With retirement quickly approaching, now is a good time to cut recurring bills. Consider downsizing your home, switching to a cheaper phone plan, and refinancing your insurance.
Lowering these costs means you'll need less income from savings. Smaller bills will also better prepare you for market downturns or unexpected expenses.
Plan for Social Security timing
/images/2025/07/12/social-security-and-retirement-income.jpg)
There are pros and cons of claiming Social Security early, at full retirement age, or delaying. Delaying will increase monthly benefits, but it could force you to use savings earlier.
You need to make your decision based on health, spousal benefits, and cash flow. Doing so will greatly affect your long-term financial stability.
Plan a withdrawal strategy
/images/2025/07/03/money-background.jpg)
When you're within a year of retirement, it's time to decide how and when you'll start drawing from your retirement accounts. The order of withdrawals is critical. Start with taxable accounts and move to Roth accounts later. This will affect taxes and your savings' longevity.
Tax efficiency could save you thousands during your retirement years.
Pay off high-interest debt
/images/2025/07/16/stack-of-mastercard-credit-card-on-the-table.jpg)
More than 40% of retirees carry debt into retirement. However, you should strive to minimize high-interest debt (e.g., credit cards, personal loans, etc.) as much as possible. Debt will eat into your fixed income, leaving less money for essentials.
Start by focusing on balances with the highest interest first. Being debt-free gives you more financial freedom in retirement.
Estimate healthcare costs
/images/2024/08/24/nurse-holding-hands-with-patient-adobe.jpg)
Everything discussed thus far is important, but planning for healthcare needs could very well take precedence. Healthcare is a major retirement expense. Research your Medicare options, premiums, supplemental insurance, and out-of-pocket costs.
You should also factor in long-term care planning. Only 15% of retirees have long-term care insurance, while 80% of 65-year-olds will require care at some point.
Review and rebalance investments
/images/2025/07/16/analyzing-data.jpg)
Many financial advisors recommend reducing your risk in retirement. You should start focusing on income-generating and low-volatility investments.
However, don't go too conservative. You still need growth, and rebalancing can help align your retirement strategy. Fortunately, you can seek professional help to build the right mix.
In 2023 Americans lost over $10 billion to identity theft and fraud
That's right. According to the FTC, Americans lost over $10 Billion to fraud and identity theft in 2023.
But you can safeguard your data with all-in-one identity theft protection services from Aura which comes with $1,000,000.00 in identity theft insurance1 <p>Identity Theft Insurance underwritten by insurance company subsidiaries or affiliates of American International Group‚ Inc. The description herein is a summary and intended for informational purposes only and does not include all terms‚ conditions and exclusions of the policies described. Please refer to the actual policies for terms‚ conditions‚ and exclusions of coverage. Coverage may not be available in all jurisdictions.</p> per adult, to cover you should you have eligible identity theft-related losses.
An individual plan starts at $9 per month, and you can choose a family plan that outmatches most others - includes Dark Web monitoring to scour data breaches and leaks for your sensitive personal data — such as Social Security numbers (SSN), Medicare information, and phone numbers.
Before you make your next online purchase, protect what you’ve built for a fraction of what it could cost you if your data were compromised.
Meet with a financial advisor
/images/2024/04/18/business-woman-consulting-finance-advisor.jpeg)
Every step discussed here helps you take control of your post-retirement life. However, you don't have to do this alone. Schedule a consultation with a fee-only financial advisor. They'll assess your portfolio along with the risks you face and potential withdrawal strategies.
Professional input at this stage can help you prevent critical mistakes and increase confidence.
Maximize retirement account contributions
/images/2024/04/17/retirement-account-ira-form-on-desk.jpeg)
Did you know you can make catch-up contributions to some retirement accounts once you turn 50? This means you can contribute a significant amount of money to your 401(k), IRA, or similar retirement plans. This will boost your nest egg and reduce taxable income.
Every extra dollar saved now adds additional security to your retirement finances.
Evaluate guaranteed income sources
/images/2025/07/11/american-cash-banknotes-money.jpg)
Reviewing reliable income is vital in the months before your retirement. This could include Social Security, annuities, pensions, and other guaranteed income sources. You'll need to compare these expenses to your budget.
Having a baseline lets you know how much you'll need to supplement with savings. This avoids unnecessary stress and encourages smart decisions.
Create a retirement budget
/images/2025/07/16/businessman-calculating-financial-data.jpg)
Creating a budget is perhaps the most important thing you should do in the year before retirement. Estimate your post-retirement monthly expenses, including housing, food, insurance, and entertainment.
Knowing your spending will help determine how much income you'll need. Make sure to plan for inflation and unexpected costs.
Bottom line
/images/2025/07/16/woman-searching-using-a-smartphone.jpg)
Even if you did everything right, you shouldn't become complacent in the last year before you retire. Nearly half of Americans will run out of money in retirement. Sadly, this even includes those who invested, saved, and diversified. But this doesn't have to be you.
You reinforce your financial stability when you take these steps in the year leading up to retirement. More importantly, you can identify any shortfalls that may need to be handled. Just a little proactivity can help prepare you for the future.
- Huge discounts on travel, groceries, prescriptions and more
- Access to financial planning resources and health tools
- Join AARP and get 25% off your first year
Subscribe Today
Unlock the Best Banking Deals and Bonuses
From high-yield savings accounts to cashback checking and sign-up bonuses, we bring you the best banking offers to grow your money smarter.
Author Details