Are you five years out from retirement? If so, you’re in one of the most critical financial windows of your life. What you do—or don’t do—during this period can have a massive impact on your retirement lifestyle, income security, and peace of mind.
In Episode 87 of the Last Paycheck podcast, CERTIFIED FINANCIAL PLANNER® professionals Rob and Archie Hoxton lay out a step-by-step checklist designed for people entering the final stretch of their working years. Whether you’re feeling confident or overwhelmed, this episode is packed with practical moves that make a difference.
Why Five Years Out Matters
It may seem like there’s still plenty of time—but five years is the perfect moment to tighten your plan, fix any gaps, and start rehearsing your future lifestyle. At this stage, you still have flexibility. But that flexibility will begin to close as you approach your last paycheck.
Here are the must-dos.
1. Understand Critical Ages
You’ll want to be ready for the following key milestones:
- Age 50: Eligible for catch-up contributions to retirement accounts.
- Age 59½: You can begin withdrawing from retirement accounts without penalty.
- Age 62: Earliest possible age to claim Social Security (with reduced benefits).
- Age 65: Medicare enrollment begins—miss it and you may pay lifelong penalties.
- Age 73–75: Required Minimum Distributions (RMDs) begin depending on your birth year.
These dates matter for taxes, income, healthcare, and how long your money will last. Make sure your strategy reflects them.
2. Audit Your Spending
This is one of the most overlooked parts of retirement readiness. Most people underestimate their expenses, especially for discretionary items like travel, home improvements, gifts, or hobbies.
Rob and Archie recommend:
- Reviewing 12 months of spending
- Categorizing expenses into needs, wants, and obligations
- Looking for subscription creep or lifestyle inflation
- Building a realistic retirement budget based on actual behavior—not idealized versions of it
3. Visualize Retirement
Retirement isn’t just about leaving your job—it’s about what you’ll do next. Ask yourself:
- What will your daily routine look like?
- Will you travel, volunteer, start a business, or take care of family?
- Where will you live—and will that change?
Defining these answers now helps you align your financial plan with your lifestyle plan.
4. Business Owners: Begin Succession Planning Now
If you own a business, Rob and Archie stress that exiting takes longer than you think. You’ll need time to:
- Value your business
- Groom a successor or explore buyers
- Create a tax-efficient sale structure
- Plan your income strategy post-exit
Starting this five years out gives you breathing room and negotiating power.
5. Prepare for the Unexpected
Life happens—even to the best-planned retirements. Rob and Archie urge listeners to prepare for:
- Long-term care expenses
- Market corrections just before or after retirement
- Health challenges that affect timing
- Family needs like helping aging parents or adult children
Having an emergency buffer and flexible spending strategy can help you adapt without panicking.
Final Thought
Five years may feel like the home stretch—but it’s also your best opportunity to fine-tune your plan and lock in confidence. Think of this checklist as your financial pre-flight routine. You want to know that everything’s working before you take off.