Your Pre-Retirement Checklist, Part 1: 3 Years and 5 Years

Author: AB Staff

Your Pre-Retirement Checklist, Part 1: 3 Years and 5 Years

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Though the prospect of retirement is always exciting, it can also be a little daunting. There are so many tasks you need to complete before you can retire that it can be hard to keep track. 

If you’re within 5 years of retirement, this pre-retirement checklist is for you. It breaks down the main tasks you need to accomplish in 5 different time frames: 5 years, 3 years, 3 years, 1 year, and 6 months to retirement. 

Don’t let the stress of checking items off your to-do list ruin the excitement of retirement. Simply stay organized with this handy checklist. 

5 Years to Retirement 

Though 5 years is a long time, it can fly by. The 5 years to retirement marker is when you need to start running numbers, estimating spending needs, and determining your retirement income sources. You can start playing around with retirement calculators, but definitely should be tracking your net worth.

5 years out from retirement still allows for some of the details to be a little foggy, allowing you the time to dream up what you want your retirement life to be like. Try and focus on what your ideal overall lifestyle would be, and use that to help you come up with how much income you need.

Your 5 Year checklist is: 

  • Think about retirement lifestyle 
  • Estimate retirement income sources and spending levels
  • Run at least 3 retirement calculators (this one, this one, and this one are great)
  • Track your net worth 

3 Years to Retirement 

With the time ticking down to your retirement date goal, you need to kick your savings into high gear. Most people are making more money than ever before in their careers at this time in their lives, allowing for extra savings and catch-up provisions.  

One way you can try to get more serious about your numbers is by tracking your spending for an entire year, and use the collected data to build a more accurate retirement cash flow model. Be sure to take another pass at the retirement calculators, hopefully with more accurate input information than in previous years.

You should also start really focusing on eliminating any remaining debt, and coming up with a specific amount you want saved for your retirement nest egg. 

Your 3 Year checklist is: 

  • Create a retirement cash flow model (you can try an online template for guidance)
  • Start tracking your spending for at least 6 months, but ideally for a year (check out an online spending tracker)
  • Come up with a plan to eliminate your debt 
  • Calculate your targeted portfolio value for retirement by multiplying your estimated spending by 25 or 30
  • Estimate your potential income from Social Security under different claiming plans
  • Think about hiring a financial advisor for some professional advice on your retirement readiness
  • Keep track of your large annual expenses (like real estate taxes, etc) 
  • Consider long term care insurance, as the best time to buy it is when you are in your 50s

It’s a lot easier to stay on track for retirement when you have a plan. Use this checklist to help guide you.