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Are you ready to retire? The thought of retirement can be exciting and nerve-wracking all at the same time.

Are you ready to retire? The thought of retirement can be exciting and nerve-wracking all at the same time.

As you finish out your career and begin an exciting new journey—retirement—give yourself a head start by prepping for retirement five years before the big day. Here are a few tips to help you countdown to retirement.

Take a deep breath and start planning five years before retiring.

  • Estimate—Review your health and family history to estimate how long your retirement funds need to last.
  • Calculate—Add up your monthly retirement income from pensions (including any cost-of-living adjustment), Social Security (estimate benefits on the Social Security Administration website), other income (such as a rental property or part-time job), assets you’ll sell (such as real estate or a business), and income from retirement accounts, annuities, municipal bond dividends and interest.
  • Build up—Take advantage of your employer’s 401(k) match, and consider increasing your retirement savings by at least one percent.
  • Anticipate—Use online retirement calculators to see if your savings and income will last throughout your retirement.
  • Insure—Consider disability insurance in the case that you’re unable to work.

Give your expenses and debt a closer look four years before you retire.

  • Budget—Itemize an entire year’s spending, including out-of-pocket medical costs, long-term care, taxes and inflation to create your retirement budget.
  • Pay down—Do your best to pay off as much debt as possible, including mortgages, vehicles, credit card balances and other loans.
  • Plan—Review your property, automobile, recreational and other possessions and consider downsizing. If you’re going to stay put for now, research fallback options for the future.
  • Insure—Compare long-term care insurance costs and weigh the pros and cons. If someone depends on your income, consider purchasing life insurance.
  • Consult—Talk to your financial advisor for help on running your numbers to identify planning gaps and refine your investment strategy.

Get your things in order three years before retiring.

  • Catch up—Complete postponed home-maintenance tasks, and try to get ahead of anticipated repairs and replacements.
  • Explore—Contact the Social Security Administration to learn about taking benefits earlier rather than later, and choose when you’ll claim your benefits.
  • Study—Learn all you can about converting savings to an income stream and plan how you’ll withdraw your funds, including how to meet Required Minimum Distributions, or the minimum you must withdraw from your retirement account each year.
  • Supplement—If money will be tight, find a second source of income, such as starting a business on the side or working a part-time job.
  • Assess—Decide the bare minimum you need for a comfortable retirement and determine if you can fill income gaps or if you should delay your retirement.

Give your retirement budget a test-drive two years before you retire.

  • Test—Live on your retirement budget to see where it needs adjusting.
  • Plan—Write a will, consider establishing a trust, file healthcare directives and appoint a legal power of attorney.
  • Disconnect—Tell adult children, lovingly, that they’re on their own financially.
  • Regroup—If you can’t afford to retire, then wait. Run your worst-case scenario with a financial planner, work longer, delay collecting Social Security and cut spending to the bone.

Finalize your retirement plans one year before retiring.

  • Decide—Contact the Social Security Administration to learn about taking benefits earlier rather than later, and choose when you’ll claim your benefits.
  • Replace—If you can afford to, consider buying new when your appliances and vehicles need to be replaced.
  • Sign up—Research Medicare and supplemental medical plans and enroll in Medicare three months before your 65th birthday.
  • Consult—Consult a professional for help before withdrawing income from your retirement portfolio.


This five-year retirement countdown is based on Emily Guy Birkin’s book, The 5 Years Before You Retire: Retirement Planning When you Need It the Most.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

To determine which course of action may be appropriate for you, consult your financial advisor.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

LPL Financial representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

This material has been prepared by LPL Financial, a registered investment advisor, member FINRA/SIPC.

To the extent that you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.

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