If you're a decade or so away from retirement, you've probably spent at least some time thinking about this major life change. How will you manage the transition? Will you travel, take up a new sport or hobby, or spend more time with friends and family? Should you consider relocating? Will you continue to work in some capacity? Will changes in your income sources affect your standard of living?
When you begin to ponder all the issues surrounding the transition, the process can seem downright daunting. However, thinking about a few key points now, while you still have years ahead, can help you focus your efforts and minimize the anxiety that often accompanies the shift.
1. Reassess your living expenses
A step you will probably take several times between now and retirement is thinking about how your living expenses could or should change.
For example, while commuting and other work-related costs may decrease, other budget items may rise. Healthcare costs, in particular, may increase as you progress through retirement.
Try to estimate what your monthly expense budget will look like in the first few years after you stop working. And then continue to reassess this budget as your vision of retirement becomes reality.
Keeping a close eye on your spending in the years leading up to retirement can help you more accurately anticipate your budget during retirement.
2. Estimate your income
First, figure out how much you may receive from Social Security. The amount will depend on your earnings history and other unique factors. If you wait until your full retirement age (66 or 67, depending on your birth date) or later (up to age 70), your benefit will be higher. The longer you wait, the larger it will be. You can get an estimate of your retirement benefit at the Social Security Administration website, ssa.gov.
Next, review the accounts you've earmarked for retirement income, including:
- Employer sponsored plans, such as 401(k) and 403(b) accounts;
- IRAs;
- Taxable investment accounts;
- Annuities; and
- Other sources.
Try to estimate how much they could provide on a monthly basis. If you are married, be sure to include your spouse's income sources as well.
3. Reduce your debt
Entering retirement debt-free — including paying off your mortgage — will put you in a position to modify your monthly expenses in retirement if the need arises. On the other hand, entering retirement with a mortgage, loan, and credit-card balances will put you at the mercy of those monthly payments.
4. Consider future health care costs
In 2025, the Employee Benefit Research Institute reported that the average 65-year-old married couple retiring in 2024 with median prescription drug expenses would need about $366,000 in savings to have a 90% chance of meeting their insurance premiums and out-of-pocket health-care costs in retirement.
Although Original Medicare (Parts A and B) will cover a portion of your costs, you'll still have deductibles, copayments, and coinsurance. Unless you're prepared to pay for these costs out of pocket, you may want to purchase a supplemental Medigap insurance policy or sign up for a Medicare Advantage plan. Both of these options can cover some or all of expenses not covered by Medicare Parts A and B.
5. Boost your savings rate
In these final few years before retirement, you're likely to be earning the highest salary of your career. Why not save and invest as much as you can in your employer-sponsored retirement savings plan and/or IRAs? Aim for maximum allowable contributions. And remember, if you're 50 or older, you can take advantage of catch-up contributions.
6. Anticipate future taxes
As you think about when to tap your various resources for retirement income, remember to consider the tax impact of your strategy.
For example, you may want to withdraw money from your taxable accounts first to allow your employer-sponsored plans and IRAs more time to potentially benefit from tax-deferred growth.
Keep in mind, however, that generally you are required to begin taking minimum distributions from tax-deferred accounts once you reach age 73 (75 for those who reach age 73 after December 31, 2032).
If you need help
Meeting with a financial advisor can help you plan for retirement with greater confidence.
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Prepared by Broadridge Advisor Solutions with additional content from Canby Financial Advisors. © 2026 Broadridge Financial Services, Inc.