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What to Do the Five Years Before You Retire

Before You Retire

Ideally, you’ll start planning and saving for retirement decades before you actually retire. And during retirement, you’ll need to think carefully about how you manage your finances and how you take care of yourself to ensure you don’t outlive your savings. But what should you be doing in the five years or so before you retire, to make sure your retirement is a successful, financially bountiful, comfortable one?

Set the Right Mindset

Before anything else, it’s important to set the right mindset. Preparing for retirement in the five years before you formally retire is all about balance.

First, you need to think about the balance between living life the way you always have and living life in retirement; these are two drastically different lifestyles, and if you’re smart, you’ll attempt a gradual transition from the former to the latter. The smoother and more controlled your transition is, the less disruptive it’s going to be and the more successful your retirement will be.

Second, you’ll need to find the right balance of efforts to make for retirement preparation. If you become obsessed with preparing for retirement, it can come to completely dominate your life and end up stressing you out. On the other end of the spectrum, if you’re too passive or unwilling to invest time or effort, you might be overwhelmed when it’s time to fully retire.

Granted, you can always choose to delay retirement if you feel you’re not ready – but if you want to stick to your plan and retire successfully, it pays to adhere to some kind of schedule.

Give Yourself a Personal Finance Audit

Early in the planning process, you should give yourself a personal finance audit. This is an opportunity for you to evaluate your current finances, so you can accurately ballpark what you’ll have in retirement – and make any changes necessary to accommodate that future.

For example, you should look at:

Current Expenses

How much are you currently spending every month? Do you anticipate these costs to be higher or lower when it’s time to retire? Eventually, you’ll have a picture of how much income you’ll have in retirement, and you’ll be able to deduce whether your expenses make sense in that picture.

Current Income

How much money are you currently making? Where are these streams of income coming from and how many of them will continue to be available to you after you retire? Most people experience a significant income drop after retiring.

Retirement Savings and Investments

How much do you currently have saved? Which investments do you have and how are they being held? If you follow a rigid formula, like adhering to the 4 percent withdrawal rule, how much money would you be able to spend on a monthly basis?

Growth Projections

You’re not going to retire for another five years. Accordingly, if you continue investing at the same rate, and you see growth rates in line with historical averages, how much will your principal increase? How much would that increase your available spending money?

Invest in Your Health

Some of the biggest expenses you’ll face in retirement are related to healthcare and medicine. After retiring, you may have access to different or inferior health insurance coverage, and even if you’re thrilled with your coverage, you’ll likely face more health issues as you age.

Accordingly, now is a great time to invest in your health. You want to be in peak shape leading up to your retirement.


If you have good insurance in place, make sure to attend all your regularly scheduled checkups. Proactive checkups may be annoying, especially if you have a busy schedule, but they’re incredibly cost effective and capable of catching issues early, potentially saving your life in the process.

Dental Issues

You also can’t afford to neglect your teeth. Depending on your current level of dental coverage, it may make sense to take care of long-standing dental issues now, while you’re younger and equipped with more income. For example, dental implants look and function like normal teeth, but they can replace broken or missing teeth in your mouth. As you get older, dental implant surgery becomes riskier, so it makes sense to have this procedure early when possible.

Surgeries and Treatments

If there are any other surgeries, treatments, or issues that you’ve procrastinated, now is the time to undergo them or address them. Work with your doctor to evaluate your overall health and take any measures necessary to improve it.

You can also reduce your lifetime medical and healthcare expenses by changing how you live your life. If you do this now, you’ll have even more time to improve your health before retirement – and your good habits will likely stick throughout your retirement years.

Dietary Habits

Pay close attention to what you eat. Avoid consuming too many calories and make sure you get a diverse mix of different fruits, vegetables, lean sources of protein, and whole grains daily. It’s also important to stay hydrated.

Physical Exercise

Physically exercise every day that you can, as it’s one of the best ways to reduce stress and stay in good health. Even if the only exercise you get is a walk around the block, you’ll benefit from the activity.

Bad Habit Elimination

If you’ve had bad habits your whole life, like smoking or drinking alcohol, you may feel like working to eliminate the habit is a waste of time at this point. However, evidence shows that quitting bad habits like smoking can be beneficial even for older adults who have spent decades engaging in those bad habits. You can do it!

Start Planning for Retirement Expenses

Next, start planning for your retirement expenses if you haven’t already. Most people intentionally downgrade their lifestyle a bit in retirement to accommodate less income and the natural course of aging – but that may or may not fit your individual vision.



Is your house paid off or will it be paid off in the near future? Are you thinking of moving somewhere else? What housing options are available to you?


What type of health insurance are you going to have in retirement and how much is it going to cost you? How much coverage does it offer? If your health takes a turn for the worse, what are you going to pay for things like appointments, treatments, and prescription medications? Make sure you plan for your healthcare expenses to increase in the future.


How much are you going to spend on food and groceries? Are there measures you can take to reduce these costs without impacting your nutritional intake?


How much are you going to travel? What are you going to do for entertainment? What kind of hobbies do you want to practice? Entertainment and recreation aren’t strictly necessary expenses, but they are important to consider when planning for retirement.

These aren’t the only expenses you’ll face in retirement, obviously, but they are some of the most important and most controllable.


Downsizing is an essential strategy for millions of retirees. Essentially, it means reducing your expenses by making sacrifices or downgrading certain aspects of your life. For example, you could move to a smaller home in a cheaper area of the city; such a move would reduce your monthly expenses, and possibly entitle you to more money to invest and withdraw from (if you sell your house).

As you get older, downsizing is going to be harder. You may be less flexible or less mobile, and you’ll be even more acclimated to this current environment. If you plan on downsizing for your retirement, it could be wise to start the process now, while you have more strength, resources, and adaptability.

Pick Up a Sustainable Side Gig

It’s wise to have a side gig in retirement. It’s a great way to make some extra money and help your retirement savings go a little further. But it’s also a great way to stay mentally sharp and/or physically in shape.

The key is to choose a side gig that’s sustainable; in other words, it should be something that you’re able to do now, but also something that you can do well into the future. If you start before you retire, you’ll have a smooth on-ramp to side gigging after retirement.

These are some of the best options available to you:


Are you an amateur photographer? Have you always liked the art of writing? Do you know some of the fundamentals of graphic design? If so, consider freelancing. You can choose your own clients, set your own hours, and (for the most part) work from the comfort of your home. It’s an excellent retirement gig that can make you money for years to come.


If you own a car and you’re still able to drive it confidently and safely, consider driving for a ridesharing company. In addition to making some extra money, it’s a great way to meet new people and explore your city.


If you’re approaching retirement, it’s likely that you’ve learned quite a bit over the course of your career. That means you have something valuable to teach to others. Consider teaching or consulting as a side gig to make some extra money and help a new generation find success.

Online Business

If you’re more entrepreneurial, you can consider starting an online business as well. Offering unique content, reselling excellent products, or offering totally novel products of your own could generate a powerful stream of revenue for you.

Find Hobbies (and New Friends)

Retirement isn’t just about meeting your basic living expenses. It’s also about genuinely thriving during your golden years. Accordingly, it’s a good idea to find some hobbies that might be able to sustain you and help you socialize in your retirement. The more time you have to learn these hobbies and build your social circles, the more fulfilling they’re going to be in your retirement years.

These are some of the most popular options:


Gardening requires some physical effort, but not much, and the benefits of your labor are both beautiful and practically functional. If you grow your own fruits and vegetables, you can even use gardening to save money on groceries.


Whether you like the art and technical mastery of dance or just like expressing yourself, dance is a great way to stay in shape and connect with other people in retirement. Start with something slow and simple, then work your way up to more advanced forms and activities.


There are many reasons why retirees love golf; it’s relaxing, yet somewhat competitive, and it’s a great way to get non-strenuous exercise outdoors. Assuming you can afford it, now is a great time to learn the basics or perfect that swing.


Photography isn’t hard to learn, but it’s a hard art to master. If you develop your skills in this area, you can also use your photography to make money on the side.

Bird Watching

If you like being outside but you don’t want anything too challenging or intimidating, consider bird watching. It’s a way to connect with nature and share rare experiences with others.


Many retirees want to continue learning for the rest of their life, even if they don’t have a career where they can apply their new knowledge. See if there are any community colleges, workshops, or groups in your area where you can learn new skills and concepts. Of course, if that fails, you can always spend more time at your local library and watching YouTube videos at home.

Get Your Affairs in Order

Nobody likes to think about death, but it’s an important part of our reality and something that’s best planned for. The earlier you plan for it, the more time you’ll have to get all your affairs in clean order. Because of this, it’s wise to start getting some of your affairs in order before you even retire. Consider putting a will together, planning your estate, and making some plans for potential end-of-life care if it becomes necessary.

There may be a specific date when you’ll retire for good, but realistically, retirement shouldn’t happen all at once. It’s a process that should gradually unfold as you take greater control of your finances and gradually plan for your post-working life. If you start planning for retirement five years (or more) before you actually retire, you’ll be in a much better position to enjoy these valuable years.

Featured Image Credit: Photo by Monica Silvestre; Pexels; Thank you.

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Deanna Ritchie is a managing editor at Due. She has a degree in English Literature. She has written 2000+ articles on getting out of debt and mastering your finances. She has edited over 60,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite.

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