At a Westport Senior Center workshop last fall, a man raised his hand and said: "I've been in the same job for 28 years. I'm planning to retire in 18 months. What should I already be doing?" The room went quiet. It was the best question anyone had asked me in years — it assumed competence and demanded specificity.
I gave him a number: twenty-four months. If you're two years out, there are at least eight things that should already be in motion. Miss them and Day One feels less like liberation and more like free-fall. Most retirement checklists are so abstracted from the mechanics that people finish them, feel briefly prepared, and do nothing for six more months. What they need isn't a list of equal items. It's a sequence — tied to a real calendar, with specific gates.
This is that sequence, in the order I walk clients through it.
Start Here: Audit Your Social Security Earnings Record
Most people assume the Social Security Administration's record of their earnings is correct. It often isn't. A missing year, an employer that filed under the wrong EIN, a self-employment year that never got matched up — any of these can shave $40 to $80 off your monthly benefit, permanently. The earnings record is the foundation the entire benefit calculation runs on, and the time to fix it is before you retire, while your employers still have active payroll records.
The correction window is narrow: SSA's statute of limitations is three years, three months, and three days from the year the error occurred. After that, you can still try, but the burden of proof shifts entirely to you. Log into my.ssa.gov, pull the full earnings history, and compare it year-by-year against your tax returns. If anything looks wrong, file Form SSA-7008 (Request for Correction of Earnings Record). Free to file. Permanent fix.
While you're in there, note the 3-month lead time for filing benefits. You don't file for Social Security on your retirement date — you file roughly three months before you want the first check. Whether to claim at 62, full retirement age, or 70 belongs to a different article — see when to actually start collecting Social Security for the claiming-age math. And if you want to check this year's benefit landscape, see your current estimated benefit.
I have clients who walked into the claiming decision without auditing the record first. They made a multi-decade decision based on a number that may have been wrong.
Run the Budget on Retirement Income — While You Still Have a Paycheck
This is the most underutilized strategy I recommend, and it costs nothing. Six to twelve months before your retirement date, pick a target month and start living as if your salary has already been replaced by projected retirement income — Social Security estimate, pension if you have one, planned IRA withdrawal at whatever rate you've chosen. Add it up. Subtract fixed expenses. Whatever's left is what you actually have for discretionary spending.
The gap, if there is one, becomes visible while you still have a paycheck to close it. Most people discover the gap in month two of retirement, when they're already committed. Running it ahead gives you options: trim expenses, delay the date, rethink the withdrawal rate.
When Maggie retired from teaching, she asked me to run our own numbers "like I'm a client, not your wife." She found two inefficiencies I'd missed because I was too close to my own finances. Even people who do this professionally need to actually run the exercise.
Run it for at least three months before you give notice. Tight while you're working is solvable. Tight after you've retired narrows your options considerably.
Plan the Healthcare Bridge — The Gap Nobody Prices Correctly
If you retire before 65, you are not yet Medicare-eligible, and you need to cover the gap. This is the section most people under-prepare. What I've seen over 35 years is that healthcare-bridge mistakes drain more first-year retirement cash reserves than any other category of error.
Three options, with their actual costs:
COBRA extends your employer group plan for up to 18 months. You pay the full premium — employer share plus employee share — plus a 2% admin fee. The number will surprise you. The average employer-sponsored family premium ran roughly $25,572 a year in KFF's 2024 Employer Health Benefits Survey, and you've been paying maybe a quarter of that through payroll deductions. COBRA at the full rate is often closer to $2,200 a month for a family. Pull your plan's COBRA disclosure from HR before you give notice so you know the exact figure.
The ACA Marketplace becomes a real option at retirement because your income typically drops sharply, which may qualify you for a premium tax credit. The calculation uses your expected modified adjusted gross income for the year — not your prior year's salary. If you retire mid-year, your wages from the working months still count for that year. Job loss (retirement counts) opens a 60-day Special Enrollment Period on HealthCare.gov. Bronze and Silver plans vary widely by state and age, so price them specifically.
Retiree health coverage from your employer is rare and getting rarer, but if your employer offers it, do not assume it works like active-employee coverage. The premium structure changes. Spousal coverage may terminate when you reach 65 and move to Medicare. Read the plan document, not the HR summary.
For scale: Fidelity's 2024 Retiree Health Care Cost Estimate put the figure at roughly $165,000 over retirement for a 65-year-old individual, more for a couple. That's a planning number, not a bill, but it's the right scale to keep in mind when deciding whether to retire at 62 or wait for Medicare.
Decide What to Do With Your Employer Retirement Plan
The default assumption is that you roll your 401(k) to an IRA the day you retire. That's often right. It is not automatically right, and three scenarios deserve a closer look before you initiate the rollover.
First, Net Unrealized Appreciation. If your 401(k) holds highly appreciated employer stock, distributing those shares in-kind to a taxable account and paying long-term capital gains rates on the appreciation — rather than ordinary income rates on the eventual IRA withdrawal — can save a meaningful amount. NUA treatment only works before a rollover. Once it's in an IRA, the option is gone. IRS Publication 575 covers the rules.
Second, stable-value funds. These are only available inside employer plans, not in IRAs. If yours pays a competitive rate and you want a slice of conservative principal-protected ballast, leaving a portion of the 401(k) at the employer is rational.
Third, outstanding 401(k) loans. If you have a loan against your plan, understand what happens at separation. Most plans demand full repayment within 60 to 90 days, or the outstanding balance is treated as a taxable distribution — ordinary income tax plus a 10% early-withdrawal penalty if you're under 55. Know the rule before you give notice, not after.
The rollover itself, when you do it, should be a direct trustee-to-trustee transfer to your IRA custodian. A check made payable to you triggers mandatory 20% withholding even if you intend to reinvest it within the 60-day window. And once the money is in an IRA, the window opens for the Roth conversion strategy that reduces future RMD exposure — a separate decision that becomes available the moment you leave employment.
Size Your Emergency Fund for Retirement, Not Your Working Years
The conventional three-to-six-months emergency fund is advice for someone with a paycheck and employer health coverage. It does not apply in retirement. In my experience, the right number is two years of living expenses held in cash or near-cash — high-yield savings, money market, short-term Treasuries — kept separate from your investment portfolio.
Two years sounds excessive until you think about why. If you retire and the market drops 25% in year one, a two-year cash reserve lets you live on cash while the portfolio recovers, rather than selling equities at a loss. This is sequence-of-returns risk, and the math is unforgiving for anyone who retires into a bad market.
This is one of the few areas where I tell clients the number is firm. A workshop attendee last year argued that two years was "a lot of money sitting around." It is. It's also the difference between a bad market being inconvenient and a bad market rewriting your retirement.
Map Your Tax Trajectory Before the Brackets Shift
This gets a bit technical, but bear with me — the dollars are real. The years around retirement may be the last clean opportunity you have to actively manage income between two different tax regimes: your high-earning final working year and your typically lower-income early retirement years.
Three decisions worth modeling before, not after:
Final-year income timing. If you have any flexibility over your last year's compensation — deferred comp, bonus timing, vested stock options — model the tax impact of receiving it before versus after retirement. Your last working year is often your peak-bracket year. Pushing some taxable income into a lower-bracket retirement year can produce real savings.
Capital gains harvesting. Your first retirement years, before Social Security and required minimum distributions stack onto your taxable income, may put you in the 0% federal long-term capital gains bracket. That window closes — quickly — once required minimum distributions begin at 73 and Social Security comes online. Map when it opens for your specific income trajectory.
Roth conversion positioning. The same low-income window is the prime Roth conversion runway. The mechanics belong to a separate piece — link above — but the timing decision belongs here. And one warning: large Roth conversions and Social Security stacking can push you into Medicare premium surcharges two years later via IRMAA. The two-year lookback means a 2027 conversion shows up in your 2029 Medicare premium. Plan accordingly.
The practical action: a projection meeting with a CPA or fee-only CFP in your last working year. The decisions above are irreversible once the calendar year closes.
Refresh Beneficiaries and Estate Documents
Retirement is a life event, and life events should trigger a full beneficiary audit on every account — 401(k), IRA, life insurance, annuities, and any transfer-on-death bank or brokerage accounts. These designations override your will. A will that says everything goes to your spouse means nothing if a beneficiary form still names an ex-spouse or a parent who died ten years ago. I have seen this go wrong more times than I'd like to recount.
While you're at it, look at the will itself. Most people haven't touched theirs since the kids were minors. The executor you named in 1998 may not be the right person now. The charitable intentions may have shifted. The SECURE Act's 10-year payout rule for inherited IRAs also changes the calculus around leaving retirement accounts to adult children versus a trust — that's a conversation worth having with an elder law attorney before you retire, not after.
For the full estate-planning treatment, see the five estate-planning documents you need. And don't overlook medical power of attorney and healthcare directives — they belong in the same review pass.
Pay Off the Right Debt — Stop Worrying About the Wrong Kind
The "retire debt-free" advice is too blunt. There's a real distinction between consumer debt and structured low-rate debt, and treating them identically produces bad decisions.
My framework: any debt above 5 to 6% should be eliminated before retirement, because the guaranteed return on paying it off exceeds what you can reliably expect from a conservative portfolio. Credit cards, home equity lines of credit at current rates, personal loans, co-signed student loans for an adult child — those are targets. Pay them down with cash flow while you still have a paycheck.
A 30-year fixed mortgage at 3.2% with eight years left is a judgment call, not an automatic payoff. Consider this scenario: a client paid off a 3% mortgage in his last working year and drained his cash reserve to do it. Year two of retirement, his HVAC failed and the roof needed $24,000 of work in the same six months. Equity in the house, no liquidity. He ended up taking a large IRA distribution he hadn't wanted to take, which bumped his tax bracket and his Medicare premium two years later. Sequence matters as much as the math.
Build the Timeline, Not Just the List
Two years sounds like a lot of time. It isn't. The items above don't all start at the same moment. The earnings-record audit and the tax-trajectory projection belong at 24 months out. The healthcare-bridge research and the employer-plan rollover decision belong at 6 to 12 months. The budget rehearsal and the emergency-fund sizing belong at 6 months. The beneficiary and estate-document refresh can happen at any point in the runway, but it must happen before Day One.
The concrete action for this week is the zero-cost one: log into my.ssa.gov and pull the earnings history. Twenty minutes. That's the gate that opens the rest. You don't have to figure all of this out at once. You just have to know the next step.
