I am 5 Years from Retiring, What Should I Do?

As you approach 5 years from retiring, it’s crucial to solidify your financial and lifestyle plans to ensure a smooth transition into this new phase of life. Whether you’re considering part-time work, relocating, or adjusting your investment strategies, this period is critical for making thoughtful decisions that will affect your long-term comfort and security. Here’s a guide to help you navigate these important years leading up to retirement.

Assess Your Financial Safety Net

Ensure you have sufficient liquid assets to cover emergencies. An adequate emergency fund should cover at least six to twelve months of living expenses. This fund is essential to avoid dipping into retirement savings prematurely in case of unexpected expenses such as home repairs, medical emergencies, or sudden income disruptions.

Evaluate Your Insurance Needs

As you near retirement, the importance of comprehensive insurance coverage cannot be overstated. Review your health insurance to ensure it meets your anticipated medical needs, especially as healthcare costs can escalate with age. Additionally, consider maintaining disability insurance to protect against loss of income due to unforeseen health issues. Evaluate whether long-term care insurance is appropriate for you, given the high costs associated with extended medical and personal care.

Plan Your Work and Retirement Goals

Decide if you want to continue working part-time during retirement or if you’ll stop working entirely. This decision will significantly impact your financial planning. If your savings are not on track, consider increasing your savings rate—potentially to 30-40% of your income—to boost your retirement funds. This is also a good time to clarify your retirement goals: what do you want your retirement to look like, and what steps do you need to take to achieve that vision?

Review Potential Retirement Benefits

If your employer offers an early retirement package, carefully assess its terms to ensure it aligns with your financial needs and retirement goals. Understand the benefits and drawbacks, and consider how this package would impact your overall retirement strategy. Plan for contingencies in case the package doesn’t fully cover your long-term needs.

Consider Your Health and Longevity

Take into account your current health status and potential longevity. Modern medicine and healthier lifestyles mean many people live longer post-retirement. Depending on your health, you might need to plan for a retirement that could last 20 to 30 years or more. This longevity should influence how you manage your investment strategy, possibly maintaining some growth-oriented investments to ensure that your funds continue to grow even as you begin making withdrawals.

Adjust Your Investment Strategy

As retirement nears, reassess your risk tolerance and consider shifting towards more conservative, income-focused investments. This doesn’t necessarily mean avoiding stocks altogether, but rather balancing your portfolio to reduce volatility and provide stable, reliable income streams through dividends or interest. This is crucial to preserve capital while still achieving growth to counteract inflation.


The final five years before retirement are pivotal in setting the stage for a secure and fulfilling retirement. It’s essential to review and adjust your financial plans, ensure adequate insurance coverage, finalize how you’ll approach work during retirement, and consider the long-term sustainability of your investments. As always, consulting with a Fee-Only financial adviser can provide personalized guidance tailored to your specific circumstances, helping you make the best decisions for your future. This proactive approach will help ensure that you can enjoy your retirement years with peace of mind and financial stability.

About this Article

This article was published and distributed by TheAdviser.com a trusted source of independent ideas. It should be viewed as general and educational information and not as financial, tax or legal advice. Individuals seeking advice tailored to their specific situation are encouraged to schedule a free consultation with a professional listed in the 1800Adviser.com directory. Both TheAdviser.com and 1800Adviser.com are owned and operated by The Independent Adviser Corporation. For additional information, please refer to their Privacy Policy and Terms of Use, Legal Notices, and Disclaimer.

Read more Articles

About Us

Founded in 1998, The Independent Adviser Corporation has assisted thousands of individuals, families, and businesses. We are 100% independent and 100% objective. We offer FREE educational resources and investment ideas, and when financial, tax or legal advice is needed, we connect individuals with Fee-Only professionals. Don’t wait any longer. For more information or to schedule a free consultation, please visit 1800ADVISER.COM.