Five Financial Priorities for Pre-retirees
Retirement has a way of sneaking up on you and turning “someday” decisions into “right now” questions. Whatever your timeline, reviewing your retirement plan may reveal decisions that deserve attention.
Focusing on a few key priorities can help you spot gaps, clarify your goals and make thoughtful adjustments that still may be available. These five areas offer a useful place to start.
1. Finish Strong With Your Savings
If your budget allows, consider increasing contributions to an employer-sponsored retirement plan. Even a modest increase may help strengthen your savings over the remaining years of your career. Try to contribute enough to take full advantage of any employer matching contribution available to you.
Workers age 50 or older by the end of the calendar year may be able to make catch-up contributions beyond the standard limit. In 2026, most 401(k), 403(b), and governmental 457(b) plans may allow an additional $8,000. Participants who turn 60, 61, 62 or 63 during 2026 may qualify for an even higher catch-up contribution of $11,250 instead of $8,000, if their plan permits a “super catch-up.” At age 64, the standard age-50 catch-up limit generally applies again. Because these limits may change each year, review the current rules and your plan’s provisions before adjusting your contributions.
2. Map out Monthly Income
A retirement account balance doesn’t tell you exactly how much income you may have to work with each month. Develop an estimate that includes expected Social Security benefits, pensions, retirement account withdrawals and other sources of potential income.
Next, compare that amount with your anticipated retirement expenses. Remember that costs like transportation and clothing may decrease after you stop working, while others could rise, such as travel and dining out. Running several scenarios can help you see how retiring at different ages or changing your withdrawal rate could affect your plan.
3. Reassess Risk
An investment approach that made sense earlier in your career might not be the right solution as retirement approaches. A significant market decline shortly before or after retirement could have a meaningful effect, especially if you need to withdraw money in a down market.
Review your portfolio’s asset allocation. The goal is not necessarily to eliminate risk altogether, since retirement savings may need to support you for decades. Instead, consider whether your current level of risk matches your timeline, income needs and personal risk tolerance.
4. Premiums, Prescriptions and Out-of-pocket Medical Costs
Health care spending can be significant during retirement. You may need to cover the cost of insurance premiums, deductibles, prescriptions and any out-of-pocket services that may not be fully covered.
If you plan to retire before you’re eligible for Medicare, consider the cost of coverage during that time. If you’re approaching Medicare eligibility, learn about enrollment periods and important deadlines as well as available coverage options.
You may also want to explore whether a health savings account (HSA) could play a role in your long-term plan if you’re eligible to contribute. Eligibility generally requires enrollment in a qualifying high-deductible health plan, with no disqualifying additional health coverage. You also generally cannot contribute after enrolling in Medicare or while eligible to be claimed as someone else’s dependent.
HSAs offer triple potential tax advantages: Contributions may be tax-deductible, any investment growth may be tax-deferred and withdrawals for qualified medical expenses are generally tax-free. State tax treatment may differ. Unlike some workplace spending accounts, unused HSA funds can carry forward from year to year, potentially be invested and remain yours if you change jobs or retire. Building that balance while you’re working can create a flexible, dedicated resource for eligible health care expenses in retirement.
5. Firm up Your Financial Foundation
Retirement planning is about more than building an investment account. Review high-interest debt, your emergency savings and any major expenses expected during the early years of retirement.
Reducing costly debt before leaving the workforce may provide more flexibility when your paycheck ends. A separate emergency cash reserve could also help cover unexpected expenses without requiring an unplanned investment withdrawal. Consider upcoming needs, such as aging-in-place enhancements to your home or vehicle replacement, when deciding how much readily available money may be appropriate.
Putting It All Together
You can’t boil down retirement readiness to a single number. It depends on how your savings, spending, health care plans and investment choices work together. Reviewing these priorities and your plan now may help you make better decisions while time is still on your side. For help evaluating your circumstances and deciding what adjustments might best suit your goals, consider speaking with a Financial Professional.
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