If you’re retiring within a year, this is not the time to coast — it’s the time to get extremely intentional. The final year before retirement is one of the most critical windows to make sure your finances, benefits, and long-term strategy are truly aligned with the life you want to live. From locking in income sources to stress-testing your budget, the decisions you make now can have decades-long consequences. The good news: With a clear checklist and a bit of focused effort, you can enter retirement feeling confident instead of uncertain.
Max Out Your Retirement Contributions
If you’re still working, this is your last opportunity to supercharge your savings. That means contributing as much as possible to your 401(k), IRA, or other retirement accounts, especially if you’re eligible for catch-up contributions. Even a single year of max contributions can meaningfully boost your nest egg and give you more flexibility once you stop earning a paycheck. Financial experts consistently emphasize using your final working year to take full advantage of tax-advantaged savings opportunities.
Build (and Stress-Test) Your Retirement Budget
Before you retire, you need a clear picture of what your monthly expenses will actually look like. That includes essentials like housing, food, and healthcare, as well as discretionary spending like travel and hobbies. Just as important: Stress-test your budget by factoring in inflation, unexpected costs, and longer life expectancy. Many retirees underestimate their spending, which can put their savings at risk over time.
Decide When to Claim Social Security
When you claim Social Security is one of the most important financial decisions you’ll make. You can start as early as age 62, but your benefits are reduced if you claim before your full retirement age — and permanently so. On the other hand, delaying benefits can significantly increase your monthly income for life.
The right timing depends on your health, life expectancy, income needs, and overall strategy, so it’s worth running multiple scenarios before deciding.
Create a Retirement Withdrawal Strategy
Saving is only half the equation — how you withdraw your money matters just as much. A thoughtful withdrawal strategy can help your savings last longer and reduce taxes.
Many retirees use guidelines like the “4% rule,” but experts increasingly recommend flexible approaches that adjust withdrawals based on market performance and personal needs.
You’ll also need to decide which accounts to draw from first (taxable, tax-deferred, or Roth) to minimize your tax burden over time.
Review All Income Sources
Before you retire, take time to map out every income stream you’ll rely on, from Social Security and pensions to retirement accounts and any annuities or insurance products. It’s not just about knowing what you have. It’s about understanding how these sources work together to create a steady, reliable paycheck once your regular salary stops. Coordinating when and how you tap each source can help you reduce taxes, avoid gaps in income, and make your savings last longer, giving you more financial stability throughout retirement.
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Plan for Healthcare and Medicare
Healthcare is one of the biggest — and most unpredictable — expenses in retirement. If you’re nearing age 65, you’ll need to enroll in Medicare and decide whether to add supplemental coverage.
Even if you’re younger, you’ll need a plan to bridge the gap between leaving your employer’s health insurance and becoming Medicare-eligible. Failing to plan for healthcare costs is one of the most common retirement mistakes.
Pay Down Debt and Simplify Your Finances
Entering retirement with as little debt as possible can significantly reduce financial stress. Focus on paying down high-interest debt and consider whether it makes sense to eliminate remaining balances like a mortgage.
This is also a good time to consolidate accounts, simplify investments, and make your financial life easier to manage once you’re no longer working.
Update Your Estate Plan
Before you retire, make sure all of your legal and financial documents are current and reflect your latest wishes. This includes your will, power of attorney, healthcare directives, and beneficiary designations on your accounts. Major life changes, new assets, or even shifting priorities can make older documents outdated or inaccurate. Taking the time to review and update everything now helps ensure your wishes are clearly outlined and can save your loved ones from unnecessary stress or confusion later on.
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