5-Year Pre-Retirement Checklist

The five years before you retire are the last window to make the moves that decide your tax bill and income for the next thirty, so here's what to do, year by year.

What can you do in the last five years before retiring that you can’t do after? Most of the moves that actually matter. Once the paychecks stop and RMDs eventually begin, your options narrow fast, so this is the window where planning pays the most. Here’s the work, sequenced.

Five years out: build the map

Nail down your real annual spending baseline. Every other number depends on it.
Max your catch-up contributions while you have peak income, see the 2026 catch-up limits.
Get a clear picture of every account, pension, and benefit you hold. You can’t plan what you haven’t inventoried.
Stress-test the date itself, see the retirement date stress test.

Three to four years out: de-risk and set the date

Read your equity grant agreements before you fix a date, since stock options and RSUs can hinge on a single extra quarter.
Start unwinding any concentrated stock position so you’re not selling it all in one taxable spike.
Lock your deferred-comp payout election, because it’s close to permanent once set.
Begin building your cash reserve toward two to three years of spending.
Coordinate the date with your spouse, see spouse retirement timing.

Two years out: solve healthcare and watch your income

Build the healthcare bridge to Medicare. This is the most underestimated cost of an early exit.
Remember the IRMAA two-year lookback: the income you report now sets your Medicare premium at 65. The clock starts before you retire.
Map your first decade of Roth conversions into the low-income years ahead.

One year out: the audit

Run a full employer benefits audit so you leave nothing on the table.
Review every life insurance policy and drop coverage that no longer insures a real risk, see life insurance needs review.
Confirm beneficiaries on every account.
Decide your Social Security claiming strategy, see Social Security at 62 vs. 70.

The part most people miss

Most people treat the five years as a countdown and the planning as paperwork. The second-order truth is that these specific years, the low-income valley between your last big paycheck and your first forced withdrawal, are the most valuable tax real estate of your life. Waste them and you’ll pay for it through higher RMDs and bigger Medicare surcharges for decades. The list above isn’t busywork. It’s the difference between a retirement you steered and one that happened to you. Start at the top, and start now.