As you approach your retirement age, you may notice changes in planning. Before the last two years, you have focused on aggressive investing and long-term savings. Now is the time to review your final goals and make last-minute adjustments to your plans to ensure a smooth transition stress free retirement.
If you’re only two years away from retirement, here are nine steps to take so you’re prepared for the time when you finally say goodbye to the working world.
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1. Create a realistic retirement budget
One of your biggest concerns about retirement will probably be managing your day-to-day finances. Determine how much money you will need, and categorize your expenses based on essential and non-essential needs. Essentials include housing, transportation, food, and health care, while non-essential expenses include travel and hobbies.
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2. Calculate Your Social Security Benefits
Calculating your estimated Social Security benefits can help you determine how much you can expect to receive each month when you retire. Your benefit statement will tell you how much money you can expect to receive if you retire early, such as at age 62, and how much you will receive if you plan to wait until the full retirement age of 67. If your profits aren’t enough to cover expenses, you need to plan now how to supplement that income.
3. Plan in advance for health care expenses
One of the biggest expenses during retirement is medical care, so it’s important to make sure you have adequate insurance coverage. You can apply for Medicare three months before you turn 65. The enrollment window ends three months after your 65th birthday. Contact organizations like AARP and the National Council on Aging to get help understanding your Medicare benefits.
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4. Update your estate plan
Consider working with an attorney or tax advisor to review and update your estate plan every three to five years. Retirement planning is the perfect time to make sure all your legal documents are in order, including your will or living trust, power of attorney, and health care directive. Make sure all of these important documents reflect your current wishes and personal circumstances as you approach this new phase of life.
5. Review your portfolio
As you get closer to your retirement date, you may decide you want to shift your portfolio from aggressive growth to a more conservative allocation that focuses on maintaining and generating new wealth. Whether you’re rebalancing an existing portfolio or building one for the first time, it’s important to talk to a financial advisor to prepare for your retirement years.
6. Eliminate your debt
Before you retire, focus on eliminating high-interest credit card debt and loan payments that will eat up your retirement income. A good first step is to list your debts and start eliminating them by making additional payments. For example, you could start with the largest open accounts and work your way down. The goal is to be debt-free when you enter retirement.
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7. Think about where you want to live
As you approach your golden years, consider where you want to live in retirement, how close you want to be to friends and family, taking into account factors like climate, cost of living, and additional amenities. Consider the pros and cons of staying in a familiar community or traveling to a new location, and you may even have more savings if you sell your current home and downsize to a more affordable city.
8. Test Your Retirement Income
Now is the time to examine your retirement income and budget. The U.S. Department of Labor offers several worksheets to help you plan and determine your retirement budget. However, it may be useful to see it in action. Try living at your projected retirement income for several months to make sure your projections are realistic. It’s easier to make adjustments while you’re still working.
9. Consult a retirement planner
One of the smartest steps you can take two years before retirement is to consult a retirement planner. Using the advice of a professional, you can make confident decisions on where to put your money, how to plan your savings, and have peace of mind that your retirement will run smoothly.
ground level
Retirement planning is not a one-time thing. The day you finally say goodbye to your workplace requires years of sustained effort, especially if you want to find out if you can retire early. According to Fidelity’s 2025 State of Retirement Planning study, 70% of recent retirees expressed concern about the rising cost of living eating away at their savings, making the final two years a time to finalize your budget, review your health care and Social Security strategies, and eliminate risks.
When planning for retirement, it’s also important to align your plan with your spouse or partner to ensure that your expectations match your shared lifestyle and goals.
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