As you approach retirement, what was once a distant concept suddenly looms with urgency. Many people find themselves wondering if they have enough savings, whether their investments are too aggressive or too conservative, and if they should consider options like long-term care insurance or a reverse mortgage. In a New York Times article, retirement experts emphasize the importance of planning carefully during what they call “the fragile decade”—the five years before and after retirement. This period is crucial because the financial decisions made during this time can significantly impact your retirement experience.

To help you navigate this transition, we’ve outlined a five-year countdown to retirement, drawing on advice from financial advisers, economists, and retirees. By spreading out the work over several years, you can approach retirement with confidence and ease.

5 Years to Go

Your first step is to take a comprehensive look at your financial situation. How much have you saved? Will your savings, combined with Social Security and any pension income, be enough to cover your retirement expenses?

Action Step: Use a retirement calculator, such as Vanguard’s Retirement Nest Egg Calculator, to estimate whether your current savings will sustain you through retirement. This tool allows you to input various factors like your retirement age, expected expenses, and investment returns to project your financial future.

4 Years to Go

While it’s easy to focus on the early years of retirement, it’s essential to consider your living arrangements in later years. For example, if you think you might move into a retirement community, now is the time to start researching options.

Action Step: Explore continuing care retirement communities (CCRCs) like A Place for Mom, which can help you find communities that offer independent living, assisted living, and nursing care all in one location. This early research will give you a better understanding of your options and waiting lists, which can be long.

3 Years to Go

Retirement isn’t just about financial stability; it’s also about emotional well-being. As you get closer to retirement, consider what your daily life will look like. How will you spend your time? What will give you a sense of purpose?

Action Step: Start exploring hobbies, volunteer opportunities, or social groups now. Websites like Meetup can help you find local groups that match your interests, whether it’s hiking, photography, or learning a new language. Engaging in these activities before retirement can help you transition smoothly and maintain a sense of purpose.

2 Years to Go

The years immediately after retirement may offer unique tax-saving opportunities. If your taxable income drops significantly after you stop working, you may be in a lower tax bracket, which opens up strategies like converting a traditional IRA to a Roth IRA.

Action Step: Consult with a tax professional to discuss the benefits of a Roth IRA conversion. Websites like H&R Block provide access to tax professionals who can help you navigate this complex process. Converting to a Roth IRA can provide tax-free withdrawals in the future, offering greater flexibility in managing your retirement funds.

The Final Year

As you approach your retirement date, it’s time to explore options to make ends meet if you’re concerned about running out of money. One option is a reverse mortgage, which allows you to tap into your home equity for income.

Action Step: Before committing to a reverse mortgage, research the pros and cons using resources like the Consumer Financial Protection Bureau’s guide on reverse mortgages. Understand that while a reverse mortgage can provide income, it also comes with responsibilities like maintaining the home and paying property taxes.

Preparing for the Next Chapter

Retirement is a significant life transition that requires careful planning and reflection. By following this five-year plan, you can address both the financial and emotional aspects of retirement, ensuring that you’re ready for this exciting new chapter.

How are you preparing for retirement? We’d love to hear your experiences, tips, and questions. Join the conversation in our Age Brilliantly Forum and connect with others who are navigating the journey to retirement.