The 10 Years Before Retirement: A Critical Planning Window
For many people, retirement planning begins long before they stop working. But the 10 years leading up to retirement are often one of the most important planning periods because this is when the focus typically begins to shift from building wealth to preparing that wealth to support retirement income.
During this stage, the questions often become more practical:
How much income might my savings reasonably support?
When should I claim Social Security?
How should withdrawals be coordinated across taxable, tax-deferred, and Roth accounts?
How much investment risk is appropriate as retirement approaches?
What healthcare costs should I plan for before and after Medicare begins?
These questions do not always have simple answers, but reviewing them before retirement can help individuals better understand the financial tradeoffs involved in the transition from earning income to drawing from savings.
Moving From Accumulation to Preparation
Earlier in a career, retirement planning is often centered on:
saving consistently
contributing to retirement plans
investing for long-term growth
increasing savings during peak earning years
As retirement gets closer, the planning conversation often becomes broader. Instead of focusing only on how much has been saved, individuals may also begin evaluating how those assets may eventually be used to support spending, manage taxes, and provide flexibility over time.
That shift matters because retirement planning is not just about reaching a certain account balance. It is also about understanding how income, taxes, healthcare, investment risk, and spending decisions may interact once employment income slows or stops.
Evaluating Retirement Readiness
One of the most valuable exercises in the final decade before retirement is reviewing whether current resources appear aligned with future goals.
That review may include:
current retirement account balances
estimated Social Security benefits
pension income, if applicable
taxable investment accounts
cash reserves
expected retirement spending
debt obligations
housing decisions
legacy or gifting goals
For many households, retirement readiness is less about arriving at a single “magic number” and more about understanding whether available resources appear capable of supporting future lifestyle goals under a range of scenarios.
Financial projections can be helpful in this process, but they are still based on assumptions. Actual results can differ due to market returns, inflation, longevity, healthcare costs, tax law changes, and spending patterns.
Understanding Where Retirement Income May Come From
A strong retirement plan is not only about how much has been saved. It is also about where income may come from and how those income sources may work together.
Common retirement income sources may include:
Social Security
employer pension benefits, if available
traditional IRA or 401(k) withdrawals
Roth account withdrawals
taxable brokerage accounts
personal savings
part-time work or consulting income
Each source may have different tax characteristics, timing rules, and planning implications. Because of that, retirement income planning is often more effective when these sources are viewed together rather than in isolation.
Social Security Deserves Careful Review
Social Security is one of the most important retirement income decisions for many households, yet it is often oversimplified.
Under current SSA rules, retirement benefits can generally begin as early as age 62, but monthly benefits are reduced if claimed before full retirement age. Delaying benefits beyond full retirement age can increase the monthly benefit up to age 70, and there is generally no additional delayed retirement credit after age 70. (ssa.gov)
That does not mean delaying is always the right decision. The most appropriate claiming approach may depend on factors such as:
health and longevity expectations
marital status
spousal or survivor benefit considerations
current income needs
other retirement income sources
tax considerations
whether the individual plans to continue working
For individuals who claim before full retirement age and continue to work, benefits may also be reduced if earnings exceed the applicable annual earnings limit under SSA rules. (ssa.gov)
Reviewing Investment Risk Before Retirement
As retirement approaches, many investors begin reviewing whether their portfolio still reflects their goals, time horizon, and tolerance for risk.
This becomes especially important because market volatility can affect retirees and near-retirees differently than long-term accumulators. Once withdrawals begin, poor market returns early in retirement may have a larger long-term impact on a portfolio than similar declines later. This is often referred to as sequence of returns risk.
In practical terms, that may lead individuals to review:
their stock and bond allocation
the role of cash reserves
how near-term spending needs may be funded
whether the portfolio is expected to support withdrawals under different market environments
That does not necessarily mean every investor should become more conservative as retirement approaches. It means the investment strategy should be reviewed in the context of the broader financial plan, including spending needs, other income sources, and time horizon.
Tax Planning Often Becomes More Important
For many households, the years just before retirement are also an important time to review future tax exposure.
This is especially relevant when a meaningful portion of savings is held in tax-deferred accounts such as traditional IRAs and 401(k)s, because future withdrawals from those accounts are generally taxable as ordinary income.
Planning areas that may be worth reviewing include:
coordinating withdrawals across different account types
understanding how taxable income may change after retirement
evaluating whether Roth accounts may play a role in future tax flexibility
considering whether Roth conversions may be worth analyzing
understanding the future impact of Required Minimum Distributions
Under current IRS rules, Required Minimum Distributions generally begin in the year an individual reaches age 73, with the first distribution generally due by April 1 of the following year. Traditional IRAs, SEP IRAs, SIMPLE IRAs, and many retirement plan accounts are generally subject to RMD rules. Roth IRAs are generally not subject to lifetime RMDs for the original owner. (irs.gov)
Tax planning is highly individual. A strategy that appears beneficial in one year may not be appropriate in another depending on income, deductions, filing status, legislative changes, and long-term objectives.
Healthcare Planning Is Frequently Underestimated
Healthcare is another major planning consideration in the years leading up to retirement.
For many individuals, this includes understanding how coverage will work before and after Medicare eligibility. Under current Medicare rules, the Initial Enrollment Period generally lasts 7 months: it begins 3 months before the month an individual turns 65, includes the birth month, and ends 3 months after. Missing the proper enrollment window can lead to delays in coverage and, in some cases, ongoing late-enrollment penalties for Part B. (medicare.gov)
For individuals planning to retire before age 65, healthcare planning may also involve:
reviewing bridge coverage options
budgeting for out-of-pocket medical expenses
planning for prescription drug costs
evaluating long-term care considerations
Health Savings Accounts can also become more relevant during this period. Under current IRS guidance, a person generally cannot contribute to an HSA once enrolled in Medicare, and delayed Medicare enrollment can sometimes create excess-contribution issues if coverage is later applied retroactively. (irs.gov)
Spending Often Changes in Retirement
Retirement planning is not only about investment accounts. It also involves thinking carefully about how spending may change once full-time work ends.
For example, some expenses may decline in retirement, such as commuting, payroll taxes, or retirement plan contributions. Other expenses may rise, including travel, leisure, healthcare, family support, or housing-related costs.
Questions individuals may want to explore include:
Will I remain in the same home, downsize, or relocate?
How much do I expect to spend in the early years of retirement?
Will travel or hobbies become a larger part of the budget?
Do I expect to work part time?
Could family or caregiving responsibilities affect future spending?
These lifestyle questions can meaningfully shape retirement income needs, so they are often worth addressing alongside investment and tax considerations.
Why the Final 10 Years Matter
The final decade before retirement often creates an opportunity to make planning decisions while there is still time to adjust.
This period may be a useful time to review:
retirement savings levels
anticipated income sources
Social Security timing
investment allocation
tax diversification
future RMD exposure
healthcare planning
retirement spending expectations
For many individuals, this window can offer a chance to identify potential gaps, evaluate tradeoffs, and make more informed decisions before retirement begins.
The Bottom Line
The 10 years before retirement are often one of the most important planning windows because they sit at the intersection of income planning, investment strategy, tax planning, healthcare decisions, and lifestyle expectations.
While every situation is different, using this period to review the major components of a retirement plan may help individuals better understand their options and prepare more thoughtfully for the transition into retirement.
Disclosure: This material is provided for informational and educational purposes only and should not be construed as investment, tax, or legal advice, or as a recommendation regarding any specific financial strategy or course of action. All investments involve risk, including the possible loss of principal. References to Social Security, Medicare, tax planning, Roth conversions, and retirement income strategies are general in nature and may not apply to every individual. Eligibility, tax treatment, timing considerations, and outcomes depend on personal circumstances and may change based on law, regulation, or other factors. Individuals should consult with their financial, tax, and legal professionals regarding their specific situation.