How to Get Retirement-Ready in Five Years: Nine Planning Steps to Consider

Retirement planning does not start the year you retire. For many people, the five years leading up to retirement are some of the most important planning years.

This is the time to review your income, investments, taxes, healthcare, insurance, debt, and estate plan before making the transition away from a regular paycheck. Even if retirement is more than five years away, these steps can still be helpful when thinking about your future or helping a family member prepare.

Below are nine important planning areas to review before retirement.

1. Clarify what retirement looks like

Before looking at the numbers, it helps to define what retirement actually means to you. Some people want to travel, relocate, help family, volunteer, start a small business, or simply have more flexibility. Others may want to keep working part-time or phase into retirement gradually.

Questions to consider include:

• Where do you want to live?

• How much do you expect to spend?

• Will your lifestyle change?

• Do you want to travel more?

• Will you support children, grandchildren, or other family members?

• Do you plan to work part-time?

Once your goals are clearer, your financial plan can be built around the life you actually want, not just a retirement date.

2. Stress-test your retirement plan

A strong retirement plan should not only look good in one scenario. It should be tested against different possibilities, including market volatility, inflation, healthcare costs, longevity, and changes in spending.

At Vertrix Wealth Management, the planning process helps clients evaluate whether their savings, investments, income sources, and spending goals are aligned. If there are gaps, it is better to find them before retirement begins so there is still time to adjust.

Possible adjustments may include saving more, changing retirement timing, modifying spending goals, updating the investment strategy, or creating a more structured income plan.

3. Review your investment strategy

As retirement gets closer, your portfolio may need to evolve. That does not always mean making a major change right away, but it does mean reviewing whether your investments still match your goals, risk tolerance, and income needs.

The right investment approach depends on several factors, including:

• Current portfolio allocation

• Expected retirement date

• Income needs

• Other sources of income

• Comfort with market risk

• Cash reserve needs

• Long-term growth goals

For some clients, the current strategy may still make sense. For others, it may be appropriate to gradually shift toward a more balanced approach that can support both income and long-term growth.

The goal is not to avoid all risk, but to make sure the risk you are taking still fits your retirement plan.

4. Build a retirement paycheck strategy

One of the biggest changes in retirement is moving from a regular paycheck to creating income from different sources.

A retirement paycheck strategy helps answer questions such as:

• Which accounts should income come from first?

• How much cash should be kept available?

• When should investments be sold to refill cash reserves?

• How should income be coordinated with Social Security or pensions?

• How can withdrawals be managed during a down market?

Retirement income may come from Social Security, pensions, annuities, taxable accounts, retirement accounts, Roth accounts, cash reserves, or part-time work.

The goal is to create a plan that feels organized and flexible, so clients know where their income is coming from and how it fits into the bigger picture.

5. Create a tax-efficient withdrawal plan

Retirement income planning is not only about how much money you withdraw. It is also about where the money comes from and how those withdrawals may affect taxes over time.

Many retirees have several types of accounts, including traditional retirement accounts, Roth accounts, taxable investment accounts, and cash savings. Each may be taxed differently.

Planning opportunities may include:

• Roth conversions

• Withdrawal sequencing

• Coordinating taxable, tax-deferred, and tax-free accounts

• Managing capital gains

• Reviewing charitable giving strategies

• Coordinating with Social Security taxation

• Considering future required minimum distributions

Because strategies like Roth conversions can increase taxable income in the year they are completed, these decisions should be reviewed carefully with a qualified tax professional.

Vertrix works with clients and their tax advisors to help make sure retirement income decisions are coordinated with the broader financial plan.

6. Decide on Social Security and Medicare timing

Social Security and Medicare are two major retirement decisions that should not be made in isolation.

For Social Security, the timing of when you claim benefits can affect your monthly income, lifetime income, survivor benefits, and how much flexibility you have in the early years of retirement.

For Medicare, it is important to understand enrollment windows, supplemental coverage options, prescription drug coverage, and potential out-of-pocket costs. For clients retiring before age 65, healthcare planning becomes even more important because Medicare may not be available yet.

Planning ahead can help avoid gaps in coverage, unexpected costs, or decisions made too quickly near retirement.

7. Plan for healthcare and long-term care costs

Healthcare is one of the biggest planning areas in retirement. Costs can vary based on age, health, coverage, retirement timing, and whether you retire before or after Medicare eligibility.

Clients should review:

• Medicare timing

• Supplemental coverage

• Prescription drug coverage

• Dental, vision, and hearing expenses

• Out-of-pocket healthcare costs

• Health Savings Account options, if applicable

• Long-term care risk

Long-term care is also important to review. This may include home care, assisted living, or nursing care. Not every client needs the same solution, but the risk should be discussed before retirement.

Vertrix does not sell insurance products directly, but the firm can help clients review these needs within the broader financial plan and coordinate with outside professionals when appropriate.

8. Review insurance, debt, and employer benefits

Before retirement, it is important to review what benefits may change or end when employment ends.

This may include:

• Employer-provided life insurance

• Disability coverage

• Health insurance

• Stock options or equity compensation

• Deferred compensation

• Pension elections

• Unused vacation or final pay

• Retirement plan rollover options

Debt should also be reviewed before retirement. Reducing debt can improve flexibility, but that does not always mean every loan should be paid off immediately.

The right decision depends on the interest rate, available cash, tax considerations, investment opportunities, and overall retirement income plan.

For some clients, paying down high-interest debt before retirement may make sense. For others, keeping a manageable mortgage or loan may be reasonable if it helps preserve liquidity.

9. Update estate and legacy planning

A complete retirement plan should also include estate and legacy planning.

This may involve reviewing:

• Wills

• Trusts

• Powers of attorney

• Healthcare directives

• Beneficiary designations

• Life insurance beneficiaries

• Retirement account beneficiaries

• Charitable giving goals

• Family legacy planning

Beneficiary designations are especially important because they can control how retirement accounts and life insurance pass at death. These should be reviewed regularly and coordinated with the overall estate plan.

Vertrix works alongside estate planning attorneys and other professionals to help clients make sure their financial plan and estate plan are working together.

Retirement-Readiness Checklist

If you are within five years of retirement, these are some of the key questions to review:

• Do I know how much I want to spend in retirement?

• Have I tested whether my plan works under different market conditions?

• Is my portfolio still aligned with my retirement goals?

• Do I know where my retirement income will come from?

• Have I reviewed Social Security timing?

• Have I planned for healthcare before and after Medicare?

• Have I reviewed Roth conversion or tax-planning opportunities?

• Do I have enough cash reserves?

• Have I reviewed my debt before retirement?

• Do I know what happens to my employer benefits when I retire?

• Are my estate documents and beneficiary designations up to date?

Final Thoughts

Retirement planning is not a one-time decision. It is a coordinated process that includes investments, income, taxes, healthcare, insurance, debt, and estate planning.

If you are within five years of retirement, or if you simply want a second look at your current plan, Vertrix Wealth Management can help you evaluate where you stand, what decisions may need attention, and which professionals should be involved before retirement begins.

A thoughtful review today can help create a smoother and more confident transition into retirement.