5 Years, 5 Steps — Are You Ready for Retirement?
For years, retirement felt like a distant milestone — but now it’s just five years away. If you haven’t already, this is the time to shift from simply saving to actively planning for how your savings will sustain you and support the lifestyle you desire. Let’s walk through five critical areas to review so you can head into retirement with greater confidence and peace of mind.
Envision Your Retirement LifestyleWhat does a fulfilling retirement look like to you? Take a moment and start imagining the day-to-day experience. Do you plan to travel, volunteer, work part-time or devote yourself to family? Where do you want to live — and how will housing, taxes and cost of living in that location impact your decision and align with your estimated resources?
The answers to these questions can help you fine-tune your budget and priorities. A lifestyle with more elaborate hobbies or upscale travel may require a larger budget,
while enjoying a simpler routine may allow for more modest spending. Visualizing your future in greater detail helps ensure that your financial plan supports your goals.
Run a Retirement Income Projection
Estimate your future monthly income from all sources — including Social Security, your 401(k), IRAs, pensions, annuities and any part-time work or rental income you may expect. Then compare that total to your anticipated monthly expenses. If you see a gap, there’s still time to course-correct.
Paying down high-interest debt and maximizing your retirement plan contributions can help close a shortfall. In 2025, eligible participants aged 50 and older can contribute an extra $7,500 in annual catch-up contributions to their 401(k). At ages 60 to 63, enhanced “super” catch-up contributions allow eligible participants to contribute an additional $11,250 annually. A Financial Professional can run a detailed projection with assumptions about inflation, taxes, withdrawal rates and market returns — factors that can get complex quickly — to model different scenarios.
Revisit Your Investment Strategy
As you approach retirement, it’s often prudent to reduce portfolio risk while still maintaining some exposure to growth opportunities. You’ll want to find a balance that aligns with your particular time horizon and income needs. This may involve gradually shifting from an aggressive growth strategy to one that emphasizes income or stability — such as incorporating bonds or dividend-paying stocks — to help manage risk during this important phase. The guidance of a qualified Financial Professional can be especially helpful when making these types of adjustments.
Review Your Health Care Plan
Health care is one of the biggest expenses in retirement, and it’s crucial to prepare early. Make sure you understand what Medicare does — and doesn’t — cover before you enroll. You may want to explore supplemental policies (Medigap) or long-term care insurance to help manage costs not covered by Medicare. Use this time to estimate your out-of-pocket expenses, and be sure to include them in your retirement budget.
Make a Plan for Social Security
The age at which you claim Social Security benefits can have a lasting impact. Claiming at 62 provides smaller monthly checks for a longer period, while waiting until full retirement age — or even age 70 — can significantly increase your monthly income.
Consider your health, life expectancy, spousal benefits and overall financial needs when making this important decision. Online calculators or guidance from a Financial Professional can help you evaluate different claiming strategies and choose the one that’s most suitable for your individual circumstances.
By planning now — rather than reacting later — you can give yourself the gift of more options, increased flexibility and greater peace of mind in the final stretch toward retirement.
Source
https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000