Retiring in 5 Years: Your Money Checklist

1. Step 1 Check you're on track, after tax

   See what your savings and Social Security can pay for each year, and how much more to save if you're short.

   Check your retirement plan

2. Step 2 Max out catch-up contributions

   From 50 you can add $8,000 a year to a 401(k) in 2026, and $11,250 in the years you turn 60 to 63 (IRS). If your Social Security wages from that employer were over $150,000 last year, your 2026 catch-ups must go in as Roth.

   Plan to max out

3. Step 3 Decide when to claim Social Security

   Download your statement from my Social Security and compare claiming at 62, full retirement age and 70. Waiting raises your monthly benefit for life, up to 70.

   Compare claiming ages

4. Step 4 Plan health coverage until 65

   Retiring before Medicare means COBRA (usually up to 18 months), a spouse's plan or a marketplace plan, where low income in early retirement can bring a premium tax credit.

   Compare COBRA and the Marketplace

5. Step 5 Know your Medicare sign-up window and costs

   Your first chance is the seven months around your 65th birthday; sign up in the three months before to start on time (Medicare.gov). Still working and covered by an employer with 20 or more employees? You can usually wait without a penalty. COBRA and retiree coverage don't count, so sign up at 65 if that's all you'll have.

   Compare Medicare costs

6. Step 6 Stop HSA contributions before Medicare

   You can't contribute once you're on Medicare, and Part A coverage can be backdated up to six months when you sign up after 65, so stop contributions six months before you enroll or claim Social Security (Medicare.gov; IRS Publication 969).

   See your HSA tax savings

7. Step 7 Use low-income years for Roth conversions

   The years between retiring and claiming Social Security or starting RMDs can be the lowest-tax years you'll have. Converting some traditional money then can cut future RMDs. Conversions raise income for marketplace premium credits and Medicare premiums too.

   Test a Roth conversion

8. Step 8 Watch the two-year look-back on Medicare premiums

   Medicare premiums use your income from two years earlier, so a big conversion, home sale or bonus at 63 can raise premiums at 65 (SSA). If your income fell because you stopped working, you can ask Social Security to use the newer, lower income (Form SSA-44).

   Check the surcharge lines

9. Step 9 Check how your state taxes retirement income

   Pensions, IRA withdrawals and Social Security are taxed very differently from state to state; it matters if you might move.

   Compare retirement taxes by state

10. Step 10 Know when required distributions start

    Required minimum distributions start at 73, or at 75 if you were born in 1960 or later (IRS).

    See your future RMDs

11. Step 11 Retiring before 59½? Know the penalty-free routes

    Leaving your employer in or after the year you turn 55 (50 for qualified public safety workers) lets you take that employer's 401(k) or 403(b) without the 10% penalty; governmental 457(b) withdrawals have no penalty at any age; IRAs don't have the age-55 rule, so don't roll that money over first (IRS).

12. Step 12 Build a cash cushion for the first years

    One to two years of spending in cash means you won't have to sell investments in a bad market right after you retire.

    Plan a cash cushion

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