Retirement Planning: 5 Years Before You Retire

Written By: Nathan Justice
Reviewed By: William Rivers
Published: December 25, 2020
Last updated: September 25, 2023

When you reach a certain stage in life, retirement becomes a looming reality. As someone who may be five years away from retirement, you may require a financial advisor or a retirement planning guide to help you plan for the future of your long term care. 

Moving and getting around at the age of seniority will soon have its own sets of challenges. From health concerns to stocks investment and retirement savings, we highly recommend that you get ahead before reaching retirement age. 

If you plan to make it into the real estate investment game, tax deductions via mortgage interest is advantageous. Real estate consistently appreciates, so the earlier you buy, the better.

Of course, this would not be a complete guide for retirement planning if we didn’t mention government retirement plan benefitssuch as 401 (K) and Social Security. Maximizing these policies can make for significant payouts. 

Planning software can help you properly manage your retirement savings. Many companies provide toolssuch as a retirement planning calculator to estimate your future assets as you save for retirement.

Find what works for your needs and give them the focus needed so you can properly plan for retirement.

Indicators to Gauge your Readiness for Retirement

Is retirement really for you? Is it really time to start planning for retirement at all? Should you even bother reading a guide to retirement when that reality is years away? 

These are some of the most critical questions that one needs to ask at some point. Executing a plan for retirement, if at all, should be a gradual process. That goes for anyone in their senior years.

But what do we mean by saying “if at all”? Don’t we all have to retire at some point when we reach a certain age? Not exactly. 

According to Independent UK, over one in 20 British adults plan never to retire. Another sourcesays that a quarter of Americans have similar plans. Keyword being “plans.” 

Yet, many of those reading this probably have encountered friends who never did retire. With the advent of work from home arrangements, this seems like it can become another type of retirement plan.

In this case, your retirement savings, 401 k and stocks would act as your life vest. Something you can turn to regardless of what you do or your employer decrees.  

Regardless of your plans, you have to test out how ready you are for those retirement years. Here are some indicators which might give you a better idea: 

Status of your Retirement Income and Overall Financials

Having a number in mind for your retirement plans is one thing — but being able to live with that amount of money is another.

Try living with your projected funds for a while to see if the amount is enough for expenses.  

Retirement income planning is crucial for that next step. If you aren’t anywhere close to creating a sustainable income, let alone a nest egg, you may have to postpone your retirement plan. 

Debts and liabilities are clear warning indicators to put aside your retirement plan and perhaps look at other aspects like social security and 401 K to help boost your future benefits.

If you feel you know too little about your financial assets and tax liabilities, retirement just for the sake of is also postponing the problem. Once you retire, you must assume you won’t be able to work again. 

Your Emotional State  

Gauging one’s emotional state is a question that doesn’t get asked enough. Retirement isn't just about taking advantage of tax details and insurance rates. The retirement planning definition is also about letting go.

Thus, the pride you had in pursuing and being active in your career will be greatly affected. The comfort you once got from the relationship with your employer and profession may lessen or disappear after a time.

Your retirement planning advisor should take this into account. Scheduling you with a psychologist and psychiatrist may help.

Family Status and Stability

Assuming you feel that it's almost time to retire, your family’s wellbeing obviously needs much consideration. Are they financially secure like you? Or do they need to save more money? 

Few should desire to treat their family as a resource for, say, retirement home planning. With that said, retiring within the years before one’s family has reached stability may not be the best approach either. 

Initiating your retirement plans when your family isn't struggling with money or other expenses might be a better plan. Keeping them in the loop about your overall retirement plan from the get-go is also advisable.

If you don’t have contact with any living family members, this should factor even more into your long-term plans.

Considerations When Planning and Saving for retirement

“When should you start retirement planning?” is something we previously discussed with regards to risk tolerance. When possible, retirement planning can and should ideally start as early as you can. 

The more time one has to plan, the more chances to take advantage of retirement plan benefits. 

Financial Goals

In the previous section, we mentioned financials for much of the duration. This is because financial planning retirement goals are what you’re usually aiming to accomplish first. 

Your savings and investments will need to be put under much scrutiny. A financial advisor can advise you on tax, social security, mutual funds and other financial account concerns.

We also recommend getting a retirement account specialist. They can point you on where you can make improvements to your long-term retirement account plan, as well as tax-related options such as tax free incentives that you are not aware of.

Maximize the funds you put in retirement accounts such as your 401 (K). If you happen to be 50 years of age or above, catch-up contribution programs can let you put in a lot more than average.  


Would you like to make travel a part of your retirement planning guide? If yes, how far do you intend to go? How will you save for your travel plan?

These are three of the travel-related questions you should keep in mind. If traveling is really in the cards for you, you should prepare accordingly.  

Money is something many people need access to while traveling. Setting up a consumer-friendly annuity in addition to accessing social security funds may be what you need to ensure a steady flow of check-based income. 

There are three types of insurance that you should consider: medical evacuation, trip cancellation, and travel health. 

When planning for retirement travel, you may find that your medical insurance does not cover health care service received abroad. Thus, you may need to travel health insurance to keep your medical expenses covered. 

Medical evacuation ensures you will be transported from a remote area to a high-quality medical facility. On the other hand, trip cancellation allows you to either change your itinerary plan or cancel flights at the last minute.

Retirement Home Planning 

Retirement home planning can be deceptive for its perceived simplicity. It’s easy to imagine that this should be the last thing to consult from your retirement planning guide.

However, assuming one doesn’t wish to move from their current home, you need to plan how you can continue addressing your essential needs. 

Do you have a caretaker and/or driver who can serve your long term care needs? Do you live too far from civilization to access essentials like your social security, 401 k, IRA and other benefits?

Some seniors may wish to compromise by moving into a community retirement home or live close to their family.

Once you’re confident you’ll be settling into a home, you need to make it ready. Cork, rubber, and linoleum can provide smooth surfaces while not acting as a tripping hazard. 

Indirect lighting to reduce glare and shadows as well as elevated electric sockets to reduce the necessity of bending down are some further improvements one can make.

Steps for Retirement Planning 

“What are the steps for retirement planning?” is a question that must be asked when you finally have a concrete idea of the age you want to cash in on your nest egg. 

This retirement planning guide can show you where to start but beware. You may not have the time to address them all. Tax benefits and policies in particular might prove too time-consuming. 

Best Options 

Since you may be only a few years from retirement age, a good starting point for your guide to retirement is to learn as much as you can. Start with improving your financial literacy and knowledge of stock market and tax regulations.  

Find out more about pre-tax income and tax-free incentives. Note that percentage and tax rates may vary according to national and state laws.

Government retirement planning programs can help you take advantage of insurance investment options like Roth IRA, which become ripe for claiming once you reach retirement age. Additionally, catch-up annual contributions are allowable by insurance programs such as 401 K. 

Let’s say you come from an investment-saving background. You might be inclined to go for more high-risk investments such as mutual funds and stock market trading. But you should attempt not to rely on a single source. 

Diversify your retirement accounts and investments instead. This can help diminish the risk of losing -too much capital at once.  

Real estate investment could be a good alternative. Property rates appreciate at consistent figures above yearly inflation. A real estate investment could serve a dual purpose in retirement home planning, depending on how your priorities change. 

We recommend using retirement planning software to predict your investment income figures. Retirement planning calculator programs such as thisare easy to find and use online. 

If you want to keep your investments low-risk, corporate bonds, high-yield savings, and savings bonds are where you can turn to. These take more years to pay off, but they’re an excellent place for putting incremental savings. 

How to Save Money For Retirement

Whatever steps you come up with for your retirement income planning will need to be implemented quickly. Before you even get in touch with your retirement planning advisor, you should already be tying to save as much as possible. 

Make sure to save your loose change and other incremental money, no matter how small. Reduce expenses where possible and make sure to account for where the money goes.

Don’t be alarmed if you can’t save a lot of money yet. It's much more important for you to develop the need to save as early as possible. 

This will build momentum for you to set aside more money to save for retirement. 

Read up on books and consult a financial planner to tell you how to save more. If you’re knowledgeable about investment rates, you can find yourself with opportunities to invest the money instead of settling expenses outright.   

The Securities and Exchange Commission provides financial retirement planning tools that help estimate and calculate insurance and savings. This includes a social security retirement estimator and other useful tools such as a mutual funds analyzer. 

While you’re still able, you may want to take the time to go through your belongings. Hoarding unnecessary items may only trouble you in the long run. See if you can get money or a reasonable trade from them. 

Better yet, put them up for rent and see if you can find a steady demand. If you can maintain them over time, they can add to your allocated money for long term care.

Loaning capital from friends to maximize investments may also be a good idea. 

How to Get Ready for Retirement  

Setting aside the question of money and stocks for a moment, your retirement planning tools need to address other aspects of the transition process. 

In one of the first sections of this retirement planning guide, we talked about indicators and how sometimes many people will never accept retirement. This can depend on the profession and relationship with your employer.

If you believe your career track will never stray from that employer, then stay with it. Especially since many struggle to find a purpose after the excitement of the retirement planning phase is over.  

Be open to the idea that what you might desire during the retirement planning process might drastically change ten years down the road. Taking a class or course in something new might just help you find your new sense of purpose in life. 

Take inventory of the things that you need, you want to curate (collections and properties), and the things that might just be cluttering around you.  

Once that’s done, contact an attorney to account and allocate your items, properties, and retirement accounts in a will. If you have a large number of recipients, you might need to spend time portioning them out.   

If your family is dependent on you, consider getting or updating your life insurance.

Get in touch with old contacts. While you’re still working, you might have more access to resources that will put you in contact with friends and family you’ve lost touch with. 

How to Manage Money in Retirement

Managing money means tradeoffs. While retirement is a time for you to do what you usually couldn’t do, you have to set boundaries for what you need, what you really want and what’s nice to have/do. 

Throughout this retirement planning guide, we’ve focused on what you, as the senior, will need. This means you need to prioritize spending money on yourself versus anyone else.

Which means your life insurance might have to be put on hold in favor of your need to save.

In any case, we recommend hiring a retirement planning advisor and (if possible) a financial consultant to advise you on your finances.

As we’ve previously mentioned, retirement can be optional in some cases. In this type of scenario, your retirement planning becomes a secondary plan.  

You, therefore, continue getting income until such a time that circumstances make you retire. A work-from-home arrangement for a profession such as writing can work exceptionally well.

Even while retired, you can still seek freelance projects to boost your income. One may want to offer consulting services in the same or related profession. Avoid underpricing your services if possible. 

Government retirement planning benefits can also help you out. Social Security payouts will rise the longer you delay claiming, so you might prefer to time each transaction carefully. 

Planning for the Worst-Case Scenarios  

Most will have heard some variation of the familiar retirement planning horror stories. Someone is minding their own business one day when disaster strikes. These disasters will often take several different forms. 

A medical injury happens. Your financial savings get stolen or compromised. A worldwide pandemic affects your plans for your stocks and IRA investment.

Now granted, there is little you can do to predict when instances like this may happen. But taking them into account will allow you to prepare better. 

Hospitalization Costs 

At the age of seniority, hospitalization is the most likely occurrence that can happen at any time. Medical expenses make the trip to the hospital even scarier.

So, you need to make sure that health insurance will be a big priority for you when planning for retirement. These come with policies for free preventive care, and lower expenses for covered in-network healthcare. 

To minimize the risk of hospitalization, you can opt for at-home care and other more affordable retirement home planning measures. Devicessuch as Medical Alert Systems can keep a live agent informed about your medical status 24/7. 

Safety and Security Concerns  

Personal safety is a significant concern at this stage of your life. In terms of retirement home planning, we’ve discussed prepping your home for protection. You can supplement these with senior safety products for further measures. 

If you’re afraid of burglary, theft, and other crimes, there are affordable alarm systems that can beef up security. These can alert you of attempts at forced entry even while you’re away. 

A more specific security measure that our retirement planning guide suggests is assisted living security. These types of services provide security guards and CCTV cameras to guard retirement homes and assisted living locations. 


When should you start retirement planning?

The earlier, the better. In an ideal scenario, this would be at the age of 20 or even earlier. 
Generally speaking, as soon as you can start earning wisely, you should save as frequently as you possibly can.

Early planning for retirement means your investments can grow more interest with more time.
In addition, you’ll be learning to spend more wisely, something that will help you in other aspects. 

What are the 5 stages of retirement?

a. The planning stage which may begin at any age. 

b. Excitement, which usually follows for a period of time during the preparation and retirement planning process. 

c. Honeymoon, a stage resulting from the start of the transition phase into retirement. 

d. Disenchantment, usually occurring after the celebratory phase, dissipates. 

e. Adjustment and Stability, which happens after a period of reorientation to the new circumstances. 

What is the best option for retirement planning?

There’s no one right way to approach retirement planning in general. However, certain steps can be taken to help build your own idea of acceptable risk tolerance.  

Diversification of stocks, 401 K and other retirement savings can make for a good start to your overall plan. Time management and financial research can help you find more favorable returns for your money.

What are the steps in retirement planning? 

Besides the steps we’ve laid out in the Steps for Retirement Planning section, there are other arrangements you can make. Here’s one where you can freely change the order: 
Step 1: Define one’s retirement goals. 

 Step 2: Check up on your health.

 Step 3: Evaluate your property and assets. 
Step 4: Consult a retirement planning advisor
Step 5: Find out what you can get from your 401 k, IRA and other employer and government-based benefits. 

What is there to know about savings?

From retirement savings, 401 k and stock market offerings to IRA and tax exemptions, there is so much to learn. The exact location of your home and i can involve so many factors that can affect your investments. 

So, let’s say you live in Europe but want to take advantage of higher North American rates. You might need to research exchange rate calculations between banks to maximize funds as part of your retirement income planning

Should you pay off your mortgage before or after retirement?  

Tax rates can be reduced when itemizing deductions. Investing your money in stocks and IRA instead of settling the debt immediately may serve you better. 

On the other hand, if you don’t think you can keep track of these things you may want to just pay it off outright. Leaving things to chance might be tempting fate.

Additional Resources for Retirement Planning 

Retirement Planning Near Me

retirement planning finder that lets seniors find the 10 closest retirement planning professionals near their area. 

Travel Jobs for the 50+ Travel Lover

Travel job opportunities for seniors looking to travel around the world. 

Health Coverage for Retirees

government retirement planning resource page to help seniors be informed about medical policies and benefits. 

Traveler’s Health for Senior Citizens

A resource-filled retirement planning guide about injury prevention, vaccines, travel insurance for senior travelers compiled by the CDC. 

Find a Health Center

A map finder that allows anyone to locate a nearby health facility within a given locality. 

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Nathan Justice manages community outreach programs and forums that help many senior citizens. He completed a counseling program at the University of Maryland’s Department of Psychology.
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