Retirement Retirement Planning

Within 5 Years of Retirement? 8 Things To Do Now

Practical steps to reduce stress and protect your retirement income.

By Stacy Garrels

Edited by Laura Hohenstein

Updated Feb. 14, 2026

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When retirement is still a decade away, planning can feel abstract. But once you're within five years of leaving the workforce, it can feel painfully near. This is the home stretch where minor decisions can have an outsized impact on how comfortable — or squeezed — you are during your golden years.

At this stage, the goal likely isn't chasing aggressive growth. It's making sure your money, benefits, and lifestyle plans are aligned so you can maximize your senior benefits, avoid unnecessary risks, and enter retirement with fewer financial surprises.

If you're five or so years away, here's a breakdown of what to focus on now before your paycheck stops.

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.

A home warranty from Choice Home Warranty could pick up the slack where insurance falls short.

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Get far-sighted

Many people underestimate how much they'll spend once they stop working. Start by mapping out essential expenses like housing, food, transportation, insurance, and health care, then layer in discretionary spending like travel or hobbies. A clear picture of your future expenses helps you spot gaps early on.

Also, make sure to think about what the different phases of retirement will look like.

According to Kari Polaski, a Minneapolis-based financial planner at Adaptive Financial Design, people tend to focus their planning on early retirement, often filled with travel, volunteer work, or other vigorous activity.

"People are living longer and longer," Polaski says, and yet, "People don't like to think about what the 'whole' of their retirement will look like."

She urges clients to plan for the middle and late phases, especially as they relate to healthcare needs like long-term care or ways to supplement insurance gaps.

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Get pessimistic (for your own good)

Five years out is a smart time to do a full retirement once-over. Review savings balances, expected income sources, and how long your money may need to last.

Polaski recommends stress-testing your retirement plan against different outcomes, such as market downturns, higher-than-expected costs, or exceptional longevity.

"Plan for worst-case scenarios, not best-case," says Polaski. "Don't plan around going back to work if you have to. You might not be able to, and you probably won't want to."

Fine-tune your Social Security strategy

Maybe you don't need to file yet, but you should understand how your claiming age impacts benefits. Now is the time to correct any errors in your earnings record before benefits are calculated.

For many, working part-time after retirement allows them to delay Social Security until they qualify for the highest-tier benefit amount — and transition more smoothly from full-time work into retirement.

Continued work is not always needs-driven. Polaski has many clients who work part-time for the "happiness aspect." She says, "They need to have that purpose. It's just part of their personality."

Polaski says here the goal is maximum tax efficiency, which may include backdoor Roth conversions now before taking Social Security.

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.

Get a free quote

Start preparing for Medicare decisions

Learning the basics of Medicare can prevent costly mistakes later. Polaski suggests thinking about any coverage gaps you might have between retirement and Medicare at age 65.

When you're 1-2 years away from Medicare enrollment, says Polaski, it's a good time to start shopping for different supplemental coverage options.

Get rid of high-interest debt

Carrying debt into retirement is like trying to mend a leaky roof in the rain. Now's the time to shed debt and ration income. Credit cards and high-interest debt are especially risky once earnings become fixed.

If possible, prioritize paying down balances now while you still have a steady cash flow. Entering retirement with fewer required outgoing obligations will give you more flexibility.

Think carefully about where you want to live

Housing is often one of the biggest retirement expenses. Whether you plan to stay put, downsize, or relocate, now is the time to run the numbers.

Cost of living, access to health care, proximity to family, and taxes can all affect how far your retirement dollars go — and waiting too long to plan can limit your options.

Keep in mind that so-called "retirement-friendly" states aren't always so friendly for retirees after factoring in sales tax, rent, property insurance, medical care, or lack of amenities.

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Test-drive your retirement budget

Polaski recommends that clients try living on their projected retirement income for a couple of months as a way to kick the financial tires.

This trial run can reveal spending habits you didn't notice before and highlight areas where adjustments are needed so you can create a more realistic budget.

Get your legal documents in order

Wills, powers of attorney, health care directives, and other important documents should reflect your current wishes before retirement begins. Make sure that life changes, such as marriages, divorces, or new grandchildren, are properly reflected.

Updating these now, and continuing to do so every few years, helps protect your assets and ensures your preferences are clear if something unexpected happens.

Bottom line

The five years before retirement are less about big moves and more about smart, precision refinements. Clarifying costs, reviewing benefits, reducing debt, and stress-testing your plan can help you avoid costly mistakes and build confidence for what comes next.

And if you're nearing retirement age without a plan in place, says Polaski, you still have powerful options focused on budgeting and automated savings. So don't put off making a late plan because you weren't able to start early; any plan is better than none.

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