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When You Are Within Five Years Of Retirement

December 2021

If your anticipated retirement date seems about five years away, think about some of the proactive steps you could take before that date arrives. Acting now could save you some stress later on when you move from your full-time career to the next phase of your life. Take an hour today to candidly assess how much money you spend in a typical month – your essential and discretionary outlays. You can draw a comparison between this monthly number and the monthly income you are likely to have once retired. Choices can be explored to try and narrow any income gap, if needed. It helps to have a cash reserve as you leave your career or business, because arranging that first Social Security payment or retirement withdrawal may take longer than you initially anticipate.

If you are confident that you will enter a lower tax bracket once retired, it may make sense to boost your tax-deductible retirement contributions. Give some thought to capital gains should you want to sell highly appreciated securities or a highly appreciated home in the near future. Keep in mind this article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your tax strategy.1