Financial strategy for pre-retirement
The years leading up to retirement can be some of the most important in financial planning.
For many people, income is still strong, some major expenses may be easing, and retirement is close enough that decisions made now can have a real impact on what the next phase looks like. This is the point where financial planning becomes less about simply accumulating more and more about getting organized for what comes next.
Shift from accumulation to preparation
As retirement approaches, the planning focus starts to change.
Growth still matters, but now it has to be balanced with income planning, tax strategy, and risk management. You’re no longer planning in the abstract. You’re getting closer to the point where your assets may need to support your lifestyle rather than just grow in the background.
That makes this a good time to get more specific about what retirement may actually require. What will spending realistically look like? When will you need income to begin? Which accounts will you draw from first, and how might those decisions affect taxes over time?
Evaluate retirement readiness
Once those questions come into view, retirement readiness becomes easier to evaluate in a meaningful way.
This is where general benchmarks start to matter less and personal projections start to matter more. The real issue is whether your current savings, expected timeline, and likely spending levels are aligned. It is also worth asking how much pressure inflation, market volatility, or healthcare costs could put on the plan, and whether even a modest change in retirement timing would materially improve the outcome.
In many cases, this is where a few well-timed adjustments can make a real difference. Saving more in the final working years, delaying retirement slightly, or changing the withdrawal strategy may all strengthen the picture.
Use the final high-earning years wisely
If retirement is getting closer and income is still strong, the final working years can be especially valuable.
For many people, this is the last clear opportunity to meaningfully increase retirement savings while earned income remains high. Catch-up contributions can create additional room to save on a tax-advantaged basis, and those extra contributions can matter more than people expect.
Health Savings Accounts may also deserve more attention here. If you’re eligible and able to leave those funds invested, an HSA can be an efficient way to prepare for future healthcare costs, which are often one of the more significant expenses in retirement.
At this stage, the goal is not just to save consistently. It’s to make full use of the opportunities that are still available while you have the income to support them.
Take advantage of strategic tax planning windows
The years just before retirement can also create an important tax-planning window. In many cases, income is still relatively high, but required minimum distributions have not started and Social Security may not have been claimed yet. That gap can create room for strategies that may be harder to use later.
Roth conversions are one example. When done thoughtfully, they may help reduce future tax pressure and create more flexibility once retirement distributions begin. Depending on the situation, this may also be the right time to look at the timing of income, deductions, charitable giving, or capital gains.
The bigger point is that these decisions shouldn’t be made in isolation. A tax strategy is most useful when it is coordinated with the way retirement income will eventually be structured.
Reassess investment risk and portfolio structure
As the time horizon to retirement shortens, portfolio risk can have more immediate consequences. That doesn’t necessarily mean moving everything into conservative investments. But it does mean taking a closer look at whether the portfolio is positioned appropriately for the years right before and right after retirement, when market declines can be especially disruptive.
This is also a good time to review diversification, rebalancing, and how assets are spread across taxable and tax-advantaged accounts. It’s not just about what you own, it’s also about where you own it, how easily those assets can be accessed, and how they may be taxed when you start using them.
The goal is to build a portfolio that still supports growth, but also gives more stability as retirement approaches.
Plan for social security and healthcare
Social security and healthcare planning also start to matter more as you transition closer to retirement.
When to claim Social Security can affect lifetime benefits in a meaningful way, and the right answer depends on more than one variable. Income needs, health, longevity expectations, marital status, and other available assets can all influence that decision.
Healthcare planning is just as important. Understanding Medicare timing, supplemental coverage options, and likely out-of-pocket costs can help reduce surprises and make the transition into retirement more manageable.
These choices are closely connected to the broader retirement income strategy, which is why they should be evaluated in context rather than one at a time.
Update estate and legacy planning
This is also a good point to revisit estate planning.
That may mean reviewing wills, trusts, powers of attorney, healthcare directives, and beneficiary designations to make sure they still reflect your wishes and your current financial reality. As assets grow and priorities shift, older documents often stop matching the plan you would make today.
For some families, this is also when charitable goals, gifting strategies, or broader legacy planning start becoming more relevant.
A critical window for planning
Taken together, the pre-retirement years offer an important chance to make thoughtful adjustments while there is still time to act on them.
Decisions around savings, taxes, investment structure, healthcare, and retirement timing all start to matter more because the window for course correction becomes smaller. That is why this phase often benefits from a more detailed and coordinated approach.
If retirement is on the horizon in the next several years, this may be the right time to step back and evaluate how well your current strategy supports that transition. Our team works with individuals and families to assess readiness, identify planning opportunities, and align financial decisions with the realities of retirement.
Please contact our office for more personalized guidance.
