There is a point when retirement stops feeling like something that will happen “someday” and starts feeling real. You can see it on the calendar. You may even know the date you want to leave, the trip you want to take, or how many mornings you plan to spend doing absolutely nothing.
That is usually when the questions begin.
Do I have enough? When should I take Social Security? What will I do for healthcare? Should I pay off the house? How do I turn all those account balances into money I can actually live on every month?
The five years before retirement can be one of the most valuable planning periods you have. You are likely still earning income, contributing to retirement accounts, and receiving employer benefits. At the same time, you are close enough to retirement to begin making decisions about what your life will look like.
Begin With the Life You Want
Retirement planning usually begins with numbers, but I believe it should begin with a more interesting question: What do you want your life to look like?
Where do you want to live? How do you want to spend your time? Will you travel? Help with your grandchildren? Work part-time because you enjoy it? Finally take the pickleball lessons you keep talking about?
These details matter because the retirement you want will help determine the income you need. A woman who wants to travel several times a year may need a different plan than someone whose dream is to stay close to home, tend her garden, and never sit through another Monday morning meeting.
You do not need to have every detail figured out. Most people do not. But you should begin imagining retirement as a real life rather than simply the absence of a job.
Know What Retirement Will Cost
Start with what you spend today. Look at housing, food, transportation, insurance, healthcare, travel, entertainment, gifts, and any financial help you provide to family. Then consider which expenses may disappear and which ones may increase.
Your commute may go away, but healthcare and travel could cost more. Your mortgage may be paid off, but property taxes, insurance, utilities, and home repairs will continue. Apparently, houses do not retire just because we do.
Next, identify where your retirement income will come from. That may include Social Security, a pension, retirement accounts, investment income, part-time work, or other assets. The goal is to understand how much dependable income you expect and how much will need to come from your savings.
This is also the time to ask what happens if life does not go exactly as planned. What if you retire one year earlier? What if the market falls shortly before you leave? What if one spouse dies earlier than expected? What if you live into your nineties?
Looking at these possibilities while you are still working gives you time to adjust.
Make the Most of Your Remaining Paychecks
For many women, the final working years are also some of their highest-earning years. That can create an opportunity to increase retirement contributions, reduce debt, and strengthen cash reserves.
If you are over 50, you may be eligible to make catch-up contributions to your retirement accounts. Higher catch-up limits may also be available during the years you turn 60 through 63, depending on your employer’s plan and the current rules.
That does not automatically mean everyone should contribute the maximum. Your cash reserves, debt, taxes, healthcare needs, and upcoming expenses all matter. A woman planning to replace her roof the year after she retires may need to make a different decision than someone with no debt and a fully funded emergency account.
The important thing is to make an intentional decision. You do not want to reach your final day of work and discover that you could have saved more, received a larger employer match, or prepared your cash differently.
Look at the Decisions That Work Together
Taxes, Social Security, healthcare, and your retirement date should not be considered separately.
Your tax situation may change when your paycheck stops. The order in which you use traditional retirement accounts, Roth accounts, taxable investments, a pension, and Social Security can affect your taxes throughout retirement.
The age at which you claim Social Security may also affect your monthly income and the benefit a surviving spouse could receive. Claiming early may be appropriate for one person, while waiting may be better for someone else. Your health, other income, marital history, and overall financial plan should all be considered.
Before announcing your retirement, review your employer benefits too. Look at unused vacation time, bonus requirements, stock vesting dates, pension options, retiree healthcare, life insurance, and the timing of your final employer retirement-plan contribution.
A retirement date that looks perfect on the calendar may not be perfect financially. Leaving a few weeks too early could affect a bonus, an employer match, a pension calculation, or other valuable benefits.
Healthcare also needs to be part of the decision. If you plan to retire before 65, determine how you will remain insured until Medicare begins. If you are approaching 65, learn how Medicare works before your enrollment window arrives. This is one area where assumptions can become expensive.
Prepare for More Than the Financial Transition
You can have every account organized and still feel completely unprepared for retirement.
Work provides more than a paycheck. It creates structure, relationships, responsibility, and a reason to know what day of the week it is. When that disappears, even someone who was excited to retire can feel a little lost.
During these final working years, begin building parts of your retirement life now. Reconnect with people. Try the class. Join the group. Travel when you can. Think about how you want your days to feel and what will give you a sense of purpose.
You should also make sure your beneficiaries are up to date and that your estate documents reflect your wishes. Whether you are married, divorced, widowed, or single, there is a good chance you will manage your finances alone at some point. Knowing where everything is and how it works is not pessimistic. It is empowering.
Five years gives you time to save more, reduce debt, organize your income plan, evaluate Social Security, understand your employer benefits, prepare for healthcare, and begin creating a life you will enjoy.
That is far more useful than circling a date on the calendar and hoping everything works out.
I wrote Retiring on Purpose: A Woman’s Guide to Confident, Joyful, and Intentional Retirement to help women think through both sides of retirement: the financial decisions and the life waiting on the other side of the paycheck.
Because the goal is not simply to retire. The goal is to create a retirement that works for you.