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Countdown: Five Years to Retirement

Category: Retirement Planning

July 10, 2018 — Think of your retirement as if it were a rocket poised for liftoff at Cape Canaveral. You, flight safety, are going through an elaborate countdown, ticking off countless items from exhaustive checklists. Only when everything is lined up properly is permission granted for your retirement launch!

In this piece we’ll go through a five year countdown to retirement, an excellent idea developed in a NY Times feature last week by retirement expert Peter Finch. Without first looking at what he proposed, we took our own crack at this countdown idea… and look forward to comparing notes (a link to his article is at bottom).

Five, four, three, two, one – retirement blastoff!
Although we have tried to concentrate each year on one major task, that doesn’t mean you should not be thinking about other planning aspects. This is a suggested timetable – you don’t have to be rigid about which planning area gets emphasized each year – but these are the important areas to consider. What is important is to tackle all the key planning bases with the remaining time you have before “blastoff”. Think where you live now is the best place for you to retire, and don’t need to bother? Going through this planning process helps guarantee that as a mindful decision, rather than planning by just letting things happen.

Five years out – Finances rule
Your most important task this year is prepare a financial balance sheet that shows what your expected income will be compared to your retirement expenses. By taking a serious
look at it now if you see a problem coming, it’s not too late now to try to fix it. You’ll have time to start saving more or possibly think about delaying retirement. Or, you can rethink the expense side, seeing where you might be able to live a less expensive retirement lifestyle. This financial balance sheet for retirement includes most of the common items you need to consider. You’ll find multiple tools and links in “Can You Afford to Retire – And What to Do If You Can’t“, so that is another great place to start. The Social Security Retirement Estimator is another great tool.

There are plenty of other financial issues to start working out. For example, should you be converting part of your retirement assets to a Roth IRA, and if so, when is the best time to do that? What will your Social Security claiming strategies be? What will your taxable income be once you retire (and what kind of sources will that come from, which can have important implications on where you retire). A financial planner or accountant can be a big help here.

Four years – The Where
It is not too early to start thinking about where you will retire, so that topic goes to the head of the to-do list for this year. If you (and your partner if you have one) haven’t already done a self-assessment on where you want to retire, now is time. You can find a host of useful questionnaires in our free “Baby Boomers Guide to Selecting a Retirement Community“. Important areas to consider are climate, cost of living, medical, transportation, cultural, and even the political and social environment.

There are many ways to start working on the “Where” question. Whittling away at it is one of the best approaches. Our friend Bill, who plans on retiring in the next 5-10 years, recently told us about the excellent approach he and his wife are using to narrow down the possibilities. First, they have been using Topretirements to find out about possible places to retire that might suit their preferences (they are pretty sure they don’t want to stay in Connecticut, where their retirement dollars won’t go far enough for a comfortable lifestyle). Every year they go on a trip or two to explore a new region that seems likely. From relatives living there they were already familiar with the Atlantic Coast of South Florida, which seems too crowded for them. So they moved their explorations over to FL’s west coast, and got a good sense of towns they liked there. They know Vermont and New Hampshire well from skiing, and those New England states are still contenders (New Hampshire for tax reasons). Next up on the visitation schedule are Tennessee, the Carolinas, and even the Ozarks of Missouri.

Another, very scientific, approach to the “Where” question comes from Rich. He started out in the Southeast and then to his surprise, ended up in the State of Washington. We wrote an article about his experiences in “It IS Rocket Science: How This Aeronautical Engineer Found His Perfect Place to Retire.”

Three years – What you’ll do
We know way to many baby boomers who dream of retiring, but don’t seem to have any concrete plans for what they’ll do everyday once that happens. It almost seems like their goal is to stop working, and the question of how they can happily fill that void doesn’t get enough attention. After all, as we are so fond of saying, retirement is a chance for a do-over on life. Cleaning out the garage or attic might be therapeutic for a while, but it is not a long term strategy to happiness. People are wired to stay busy, and most of us thrive when we have something to do that we love.

This is the year for you and your partner to sit down and prioritize the activities and interests you will either start, or better yet continue, in retirement. The “Baby Boomers Guide” mentioned above has checklists to help. Some of the questions center around hobbies, sports, exercise, volunteer work, part-time job, helping family members, etc. You might find out that your spouse has very different, and possibly conflicting goals. Better to find that out early so you have time to work out a compromise. It is important to realize that knowing what you plan on doing once you retire impacts every other aspect of retirement. For example, where to live so you can do the things you love, how much money that will cost, etc.

One other task to start this year is your downsizing process. Even if you decide to stay in your current home, you still need to get rid of your clutter. By working at it steadily you will be ready to move, and you won’t put an unfair burden on your heirs.

Two years – What kind of community
You not only have choices about where to live geographically, but there are so many options in the type of community available. Do you want to live around people of all ages – or exclusively 55+? A small town or a city? The beach or the mountains? Cohousing, new urban style – downtown in a city or in the suburbs. Is a Continuing Care Retirement Community (CCRC) in your future, maybe because you see health issues down the road? During this year you need to be talking to friends who have retired in various places, visiting them and likely candidates as your retirement locations. You don’t necessarily have to be ready to move the second you actually retire, but you should be ready with a plan. What areas would you like to rent as a snowbird, or spend a long vacation? At the end of the year a good goal would be to have a list of several possibilities you want to explore.

One other task this year is to start talking about your retirement plans with your family members. You might not have finalized too much by this point, but by letting them know your intentions you can head off potential problems and avoid blindsiding them later.

One year out – The countdown gets serious
Things are getting a lot closer, and the countdown checkpoints are getting more serious. You have a lot of things to make sure are in order. Are your finances in the shape you hoped? Have you been visiting a lot of different places and interviewing your friends who have retired elsewhere? Have you figured out what you are going to do to stay busy? Have you discussed your retirement plans with family members and/or close friends so there are no unpleasant surprises? There are a lot of common items you need to check OK to before you take your last paycheck.

The process should be fun
Most people, including your editor, tend to procrastinate when they have a big task in front of them. But the good news about retirement planning is that the people we talk to who take the job seriously have a lot of fun and great experiences doing it. So go ahead and get started – we hope you enjoy the ride!

For further reading
Countdown to Retirement: A Five Year Plan (NY Times)
Out of the Box Ideas – How to Survive a Retirement Savings Shortfall
Retiring on a Tight Budget (105 comments)
Topretirements Survey: Most Members Expecting a Healthy Retirement Income
Which of These 7 Fantasies Could Wreck Your Retirement
Retirement Plan on a 3 X 5 Index Card

Comments? What has been your long term approach to planning? Please share what is working (or not) in the in the Comments section below.

Posted by Admin on July 9th, 2018


  1. The Times article briefly mentions it but I would pay more attention to home renovation as I get near to retirement if you intend to relocate. We have a 20 year old suburban 5 bedroom house that we built. Many styles, technologies and furnishings have changed over that time. We are going to downsize and maybe relocate so several years ago we began to update and repair/renovate our house to be ready to sell when the time came. This can be a lengthy and time consuming process. For instance, does you house need a new roof, replacing carpeting with hardwood floors, new stainless steel appliances, new furnace/AC system, tankless water heater, stand alone tub and tub filler, painting inside and out, etc? How about the outside? Is the fencing in good shape? A good looking front lawn is important and attractive shrubs and flower beds. Is your deck/patio and pool in good repair? Many of these repairs/renovations are quite expensive so I would start them while you are still working and can pay for them easier. To get started, go to new home displays to see what builders are putting into homes in your price range or do online research. See where your house needs to be updated and get started because it won’t get done overnight.

    Editor’s comment: Great points LS, thanks!

    by LS — July 10, 2018

  2. Once we narrowed down our search of places to retire we also consulted our CPA who prepared “what-if” state and local tax returns for each location choice based on our anticipated retirement financial sources. Taxes paid on retirement income often are not a consideration in retirement planning and can be a real budget surprise AFTER you have relocated to a different state.

    by Kris — July 11, 2018

  3. Interesting article. I’m 18 months from blasting off and can’t wait!

    Articles have general advice and one should not take these guides as rules. While I agree totally with the financial planning, the relocation needs further consideration. There is no urgency to move just because one retires. In fact, depending on the demands of the job being left, there is good reason not to move right away. For instance, in my case, the human interaction stimuli is extremely high. At this point, I just want to move further out in the country on more land. Rather than run for the hills, I’ve decided to wait a year afterward to find out how many and how much contact with people is comfortable. Buying 20 acres on an island may be the worst mistake and who wants to move twice??

    Other considerations are family dynamics and community relationships. Family is a non-consideration in my case but grandkids could be a huge consideration to others. One must consider how long and strong local ties are. If only moving across town, it isn’t necessary to ponder but one should really look at all the casual relationships developed over the years on distance moves. An example is the woman running the produce market who knows my voice and will definitely have the box of Romas ready for me at the end of this month. What about the local contractor/handy man you can text and he practicality drops everything to fix a pipe or AC AND doesn’t charge an arm for the prompt service? He does get real hot chocolate during the winter, though. ?

    In other words, don’t rush! Take one’s time to analyze after retirement moves or decide not move at all.

    by AJ — July 11, 2018

  4. Kris, where have you decided to end up after all the analysis? Your story was like a cliffhanger and I am sure many members of this forum are eager to know your chosen retirement destination.


    by Jennifer — July 12, 2018

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