What to Do Ten Years, Five Years, and One Year Before Retirement

What to Do Ten Years, Five Years, and One Year Before Retirement


Written by John Rothans

Jan 26, 2022

Each time the calendar flips from one year to the next, you’re one step closer to retirement. If you’re several years or even decades away from retiring, you might not have given much thought to what your financial life will look like once you’re out of the workforce. But whether you’re one year, five years, or ten years from that point, you can still take steps to help make your retirement more comfortable.

Here are some tips for what you can do to get in better financial shape whether you’re ten years, five years, or one year away from finally letting go of work-related stress and relaxing on the beach.

What to Do Ten Years Before Retirement

If you’re ten years away from retirement, here are some steps you can take to make your golden years more comfortable.

Plot your retirement goals.

Do you want to buy a second home? Would you like to downsize to a smaller living space? Do you dream of retiring overseas? Now is the time to map out what you want your ideal retirement to look like.

Review your savings.

At this point, you should have seven times your annual salary set aside for retirement, experts recommend.

Look for ways to save more money.

If you’re nervous about having enough money for retirement, see whether you can boost contributions to your retirement plans, like your 401(k) or IRA. You might even consider taking on a part-time job or side gig to bring in more income.

Work on paying off your mortgage.

Starting to decrease the amount you owe on your mortgage can put you on the road toward paying it off and freeing up money for retirement expenses. Consider applying your tax refunds to the principal of your mortgage or adjusting the mortgage payments so that you make bigger payments throughout the year.

Check your Social Security statement.

This annual statement shows how much you’ve paid in Social Security and Medicare taxes during your career. It indicates how much your Social Security benefits should be when you reach full retirement age. Going over this statement can give you an idea of how much Social Security will contribute to your retirement income.

Remember that Social Security might not be enough to live on. The program was designed to supplement, not replace, your income during retirement.

Figure out whether you should move.

If you feel like you’re seriously behind on your retirement savings, you might determine whether it makes sense to move to a lower-cost locale so you can reduce your living expenses and put aside more money for retirement. Some of the best states to retire in financially include Alaska, Florida, Illinois, Mississippi, and Nevada.

What to Do Five Years Before Retirement

When you’re five years away from retirement, here are some moves you can make to better prepare for life after work.

Reduce your debt.

No matter what type of debt you have, such as credit card debt or personal loans, it’s time to get serious about chipping away at them. To help reduce your debt, create a household budget if you don’t already have one and prioritize which obligations to tackle first. You can also set a timetable for paying off each debt.

Cut back on splurging.

Perhaps you have your eye on a stylish new sports car, or you’re longing to take a 30-day cruise. Rethink that spending and instead focus on earmarking money you might want to spend on yourself during your retirement.

Scrutinize your portfolio.

It’s not too late to make some changes to your portfolio. For instance, you might decide to explore the benefits of additional wealth protection in the form of precious metals.

Concentrate on job security.

With just five years to go before retirement, the last thing you want to do would be to change jobs. Therefore, it’s vital to stay energized at work and continue demonstrating your skills as an employee.

What to Do One Year Before Retirement

You have one year left before retirement. That’s exciting, for sure. But what should you do now to gear up for life after work? Here are some suggestions.

Consider getting a part-time job.

Income from a part-time job can supplement your nest egg.

Organize your retirement accounts.

If your accounts are scattered among several financial services providers, you might want to consolidate accounts with one provider to ensure that you stay on top of your retirement savings more easily. You can also roll over some of your 401(k) into an IRA while you’re still employed to open up more asset options for your portfolio.

Weigh portfolio risks.

About 42 percent of Americans don’t actively review their portfolios to ensure that their holdings are diversified, reports a CNBC and Morning Consult survey.

Are you in this group? Is your portfolio weighted too heavily toward one type of asset? If so, you might think about reallocating a portion of your money to increase your portfolio’s diversification.

Decide when to claim Social Security benefits.

Delaying claiming your benefits can potentially lead to more money each month from Social Security. AARP emphasizes that the monthly amount you receive will be 76 percent higher if you wait to start receiving benefits at age 70 rather than age 62, the earliest possible age.

Establish a retirement budget.

Create a budget that outlines your retirement income and expenses. If you already have a retirement budget, it might be time to update it.

Determine how you’ll spend your time.

What do you want to do during retirement? Do you want to relocate to be closer to your grandkids? Are your sights set on playing golf more frequently? Are you itching to put your passport to work and travel the world? When you map out how you want to spend your time during retirement, you gain clarity about how you will likely spend your retirement savings.

Where are you in your retirement planning and journey? Whether you’re one year away, five years away, ten years away, or more, there’s always room to learn more strategies for increasing your retirement savings. Call U.S. Money Reserve to learn about one such strategy, a gold IRA.


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