A Retirement Income Checklist For The Five Years Before You Stop Working

For many households, retirement is not one decision. It is a series of connected decisions about when to stop working, how much income you need, which assets to draw from first, and how to make that plan sustainable.

1. Estimate Your Retirement Spending

Start with a realistic monthly budget rather than a guess. Separate core expenses from lifestyle spending. Housing, healthcare, food, taxes, and insurance should be reviewed first, then travel, gifts, hobbies, and other flexible items.

2. Review Your Income Sources

List every possible income source: Social Security, pensions, annuities, part-time work, rental income, and investment withdrawals. Seeing those pieces together helps define how much your portfolio actually needs to provide.

3. Stress-Test The First Ten Years

The early years of retirement matter because market volatility combined with withdrawals can put pressure on a portfolio. It helps to plan how much cash or short-term reserves you want available before you retire.

4. Coordinate Taxes Before You Need The Money

The years just before retirement may create planning opportunities. Portfolio withdrawals, Roth conversions, capital gains, and Social Security timing all affect your tax picture, so the income plan and tax plan should be built together.

5. Make The Transition Gradual When Possible

Retirement planning often works best when people make major decisions before they feel pressure to act. Updating your budget, insurance review, account structure, and beneficiary designations ahead of time can reduce stress later.

A retirement income plan should not only answer “How much can I spend?” It should also answer “How confident can I feel about where that income is coming from?”

If you are within five years of retirement, this is usually the right time to move from general saving strategies into specific retirement income planning.