What to do 5 years before retirement: a year-by-year checklist

Five years before you retire, the most useful things to do are to save as hard as you can (catch-up limits included), look up your real Social Security numbers, price your health cover until Medicare at 65, and decide which accounts you'll spend first. Then use the last two years to test your retirement budget, fill a cash cushion and line up the paperwork, so your last day of work is a formality rather than a leap.

Five years is a good runway. It's long enough that extra saving still adds up and short enough that the numbers are real, not guesses. Whether you're aiming for 50, 62 or 67, the checklist below counts down from "five years out" to "your last day", and each step links to a guide that goes deeper.

This is general education, not financial, tax or legal advice. Rules and limits change every year, and your plan, pension and family situation can change the answer. Check big decisions with your plan administrator, Social Security, or a licensed professional.

Figures checked October 22, 2026: the 2026 contribution limits and Roth catch-up rule on IRS.gov, and the Part B premium and Medicare sign-up window on Medicare.gov. SSA.gov blocked direct loads tonight, so the Social Security earnings-test figure reuses our October 6 check of SSA's published table.

A made-up example

Meet Ana and Luis, both 58, who'd like to stop working at 63. Between them they have about $820,000 in 401(k)s and IRAs, $40,000 in savings, and Luis has a small pension from an old job. They spend about $6,500 a month.

We'll follow them through the countdown. Their numbers are invented to show the steps, not to suggest what yours should be.

Five years out: get the real numbers

This is the year to swap rough guesses for real figures.

• Track your spending for three months. Not a budget, just what actually goes out. Then mark what changes in retirement: commuting and work clothes go, health insurance and travel may grow. Ana and Luis found their $6,500 becomes about $6,000 without work costs, plus about $1,500 for health cover before 65.
• Find your number. Multiply a year of retirement spending (minus any pension or Social Security you'll get) by about 25 for a 4% starting withdrawal. Our how much do I need to retire guide walks through it, and the FIRE number calculator does the math.
• Get your Social Security estimate. A free my Social Security account shows your earnings record and your estimated benefit at 62, at full retirement age and at 70. Check the earnings history for missing years; it's easier to fix now than later.
• Ask for a pension estimate if you have one, including the options it offers (monthly check, survivor versions, lump sum).
• List every account. Old 401(k)s, IRAs, HSAs, brokerage accounts, cash. One page, with the type of account and rough balance. You'll use this list for every step that follows.

If the gap looks big, don't panic. Five years of steady saving, a slightly later date or a little part-time income can close more than people expect. Our guide for people behind on retirement savings shows how each lever adds up.

Four years out: push savings and pay down what you can

• Use the catch-up room. From the year you turn 50 you can add $8,000 to a workplace plan and $1,100 to an IRA in 2026. If you turn 60, 61, 62 or 63 this year, the workplace catch-up is $11,250 instead (IRS). If your wages from your employer were over $150,000 last year, your catch-up has to go in as Roth. Our catch-up contributions guide turns these into a payroll percentage.
• Fill the HSA if you have a high-deductible health plan. It's one of the few accounts that can pay health costs tax-free in the bridge years, and from 55 you can add an extra $1,000. See the HSA as a long-term account.
• Think about the mortgage and other debt. Every monthly bill you clear before you stop is one your savings don't have to cover. It also lowers the income you have to show, which can help with health subsidies later.
• Don't roll old 401(k)s into an IRA without checking the rule of 55 first. If you might leave work in or after the year you turn 55, money left in that employer's plan can come out without the 10% early-withdrawal penalty. See the rule of 55.

Ana and Luis each raised their 401(k) contributions by 4% of pay, enough to use most of their catch-up room, and set a goal to pay off their car before 62.

Three years out: map health cover and taxes

• Price your health bridge. If you stop before 65, you'll need cover until Medicare. COBRA usually lasts up to 18 months; a Marketplace plan can be much cheaper if your income qualifies for help. Our guides on health cover before Medicare and the ACA subsidy cliff show how your income shapes the price.
• Decide which account you'll spend first. Most people draw from cash and taxable accounts, then pre-tax accounts, then Roth, but blending them each year can keep your tax bracket low. See which account do you spend first.
• Sketch your Roth conversion window. If your income drops when you stop work, the years before Social Security and required minimum distributions can be a good time to move pre-tax money to a Roth at a low tax rate. Starting at 63, Medicare looks back two years at your income when it sets premiums, so a large conversion at 63 can raise what you pay at 65. Our guide to Roth conversions and IRMAA has the details, and required minimum distributions explains why shrinking the pre-tax pile early can help. Lower withdrawals later can also keep more of your Social Security untaxed: see is Social Security taxable?
• Check your mix of investments. A big market drop in the first few years of retirement hurts more than one later on. That's sequence of returns risk, and the usual answer is to hold a few years of spending in steadier assets.

Ana and Luis priced a Marketplace plan for 63 and 64 at their expected income and found it was far cheaper than COBRA. They planned two years of modest Roth conversions, 63 and 64, while they'd still be on the Marketplace plan, keeping an eye on the subsidy limits.

Two years out: make a Social Security and pension plan

• Pick a claiming plan. You can claim Social Security from 62, but each year you wait up to full retirement age raises your check, and waiting past it to 70 adds 8% a year. Married couples should plan together, because the higher earner's choice also sets the survivor benefit. Our guides to claiming at 62, 67 or 70, when to claim and spousal benefits go deeper, and the Social Security calculator shows the trade.
• Know the earnings test if you might work. If you claim before full retirement age and keep working, Social Security holds back $1 for every $2 you earn above $24,480 in 2026 (SSA). The money isn't lost; your benefit is raised later to make up for it. Still, it's worth knowing before you claim early and keep a part-time job (how the earnings test works).
• Choose your pension option. Monthly check or lump sum, and single-life or a survivor option. If you're married, the survivor choice usually needs your spouse's written agreement, and it's normally permanent. See pension check or lump sum.
• Run the whole plan in one place. The pension FIRE calculator and our retirement timing page help you see how the pieces fit by age.

Ana and Luis decided Luis, the higher earner, would wait until 70 so Ana would have the bigger check if she outlived him. Ana would claim at 67. Their savings would cover the years in between. Luis chose the 50% joint-and-survivor pension option.

One year out: test the budget and build a cash cushion

• Live on your retirement budget for a full year. Spend what you plan to spend in retirement and save everything else. If it feels tight, you've learned that while you still have a paycheck. If it feels fine, you've just added a year of extra savings.
• Fill a cash bucket. Many retirees keep one to two years of spending (after pension and Social Security) in savings or short-term bonds, so a bad market year doesn't force them to sell. See the bucket strategy and, if markets are rough, retiring in a bear market.
• Put the deadlines on a calendar. The health insurance change, any pension paperwork, and Medicare. Your Medicare sign-up window lasts seven months: it starts three months before the month you turn 65 and ends three months after it (Medicare.gov). The standard Part B premium is $202.90 a month in 2026 (Medicare.gov). Our Medicare guide explains the parts.
• Check your last-day details. When does your health cover end? Will you be paid for unused vacation? Is there a bonus or vesting date worth waiting for? A few weeks can be worth a lot.
• Plan the first year, not just the money. Many people find the first months after work harder than expected. Give them a gentle shape. See your first year after work.

Ana and Luis lived on $6,000 a month in their last year of work and put the rest, about $2,200 a month, into their cash bucket. By 63 they had two years of spending in savings and a calendar with every date they'd need.

If you're still hesitating at the end

It's normal to want one more year. Sometimes it's the right call, and sometimes the numbers were ready a while ago. Our guide to one more year helps you write down what "enough" means for you before you reach it.

The five-year checklist at a glance

For a printable version, our free retirement readiness checklist covers the same ground in one page.

Common questions

What should I do 5 years before retirement?

Get real numbers: track your spending, look up your Social Security estimate, get any pension estimate and list every account. Then raise your savings with catch-up contributions if you're 50 or older, and start pricing health cover for any years before 65.

How much should I have saved 5 years before retirement?

It depends on what you'll spend. A common rule of thumb is about 25 times the yearly spending your savings must cover after any pension and Social Security. If you're short, five years of extra saving, catch-up contributions and a slightly later date can close much of the gap.

Should I pay off my mortgage before I retire?

Often it helps, because it lowers what your savings must cover each year and the income you have to show for health subsidies. But money in a house is hard to reach, so keep enough cash and savings that you can still spend. Compare your mortgage rate with what that money could earn elsewhere.

When should I start Roth conversions?

Many people start in the low-income years after their last paycheck and before Social Security or required minimum distributions. From 63, Medicare looks back two years at your income, so large conversions at 63 or later can raise your premiums at 65. Before 65, conversions can also reduce Marketplace health subsidies.

When do I need to sign up for Medicare?

Your initial window is seven months long: the three months before the month you turn 65, that month, and the three months after. If you or your spouse are still covered by a current employer's plan, you may be able to wait; check with Medicare first, because signing up late can mean a lasting penalty.

Can I retire before 65 if my job provides my health insurance?

Yes, but you'll need cover until Medicare. The usual choices are COBRA (often up to 18 months), a Marketplace plan, a spouse's job-based plan, or a part-time job that offers insurance. Price them a few years ahead, because the cost can shape your whole budget.

Next step

See what your Social Security choice is worth in dollars at 62, 67 and 70.

Try the Social Security calculator →