The five years prior to and the five years after retirement are critical to your overall success in retirement. Large losses during these years may completely derail financial plans and require a longer stint in the workforce. There are a few steps you may take to avoid severe pitfalls that might potentially ruin retirement plans. First, figure out where you are right now. This time period represents the last opportunity to cut expenses and save where necessary. Second, visit your human resources department. Doing this can help you find out exactly what resources are available for you that may further benefit, or even accelerate, retirement goals and deadlines. Next, make a plan detailing where you plan to live, how you will spend your free time, and how much money you will need to support your lifestyle in retirement. Fourth, pay off your debts. Being debt-free in retirement makes it easier to weather bad returns or a downturn in the economy. Finally, reduce investment risk. Look at your portfolio and make sure it is diversified; retirement is usually a time for preservation of assets, not heavy growth.
See Ken Moraif, The 10 Most Important Years of Your Financial Life (& How to Prepare For Them), Kiplinger, July 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
