13 Smart Moves to Make When You Are Within One Year of Retirement

Retirement is not just about leaving your job—it is about stepping into a brand-new chapter of life. If you are within a year of retiring, the countdown is on, and every decision matters. Think of it as preparing for the biggest vacation of your life, only this one does not end in two weeks. From tightening up your finances to envisioning your daily routine, there are plenty of smart steps you can take right now to make sure the transition is smooth and stress-free.

Baby Boomers especially know how fast life moves—one day you were saving for your kids’ college, and now you are staring at Medicare enrollment forms. But the good news? A little planning now can go a long way in setting you up for a retirement that is comfortable, meaningful, and maybe even more exciting than your working years.

Here are 13 essential things to do if you are within one year of retirement.

1. Stress-Test Your Financial Plan

Imagine test-driving a car before buying it—you would not just sign the paperwork and hope for the best. The same goes for retirement. Stress-testing your financial plan means running through different scenarios: What if the stock market dips? What if inflation eats more of your budget than expected? What if you live longer than you thought? Working with a financial advisor or using online tools can give you a realistic picture of how prepared you are. It is a smart way to catch gaps now before they turn into headaches later.

2. Build a Cash Cushion

When you stop collecting a paycheck, having easy access to cash becomes crucial. Financial experts recommend setting aside two to three years of living expenses in a liquid account. This “retirement buffer” protects you from having to sell investments during market downturns. Think of it like keeping a savings parachute—you hope you never need it, but it is there for peace of mind.

3. Boost Your Savings with Catch-Up Contributions

If you are 50 or older, the IRS gives you a little retirement gift: catch-up contributions. In 2025, you can contribute an extra $7,500 to your 401(k) and $1,000 more into your IRA. These additional savings can give your nest egg a serious boost before retirement begins. Do not forget about Health Savings Accounts (HSAs) either—they are triple tax-advantaged and a great way to cover healthcare costs later.

4. Fine-Tune Your Asset Allocation

Your investment mix should match your stage of life. At this point, you want to avoid taking on too much risk, but you also cannot afford to put everything under the mattress. Striking the right balance between stocks, bonds, and cash ensures that you have growth potential without sleepless nights. A little fine-tuning now helps protect your wealth while still keeping it productive.

5. Chart Your Social Security Strategy

When to claim Social Security is one of the most important decisions you will make. Taking it at 62 locks in smaller checks, while waiting until 70 maximizes your benefit. The right choice depends on your health, family longevity, and overall financial picture. Consider your lifestyle goals—whether you want to travel early in retirement or need steady income later on—and time your benefits accordingly.

6. Plan for Healthcare Costs

Healthcare is one of the biggest expenses in retirement, and Medicare does not cover everything. Premiums, deductibles, dental care, and long-term care are often overlooked until they hit your wallet. Review your options carefully, and if you have an HSA, now is the time to make the most of it. Planning ahead helps you avoid nasty financial surprises.

7. Simplify Your Finances

By now, you might have multiple retirement accounts, old insurance policies, and maybe even some dusty stock certificates. Simplifying your financial life is a huge relief. Consolidate accounts, cancel anything redundant, and streamline where possible. One clear financial picture is much easier to manage than juggling multiple accounts—especially once you are retired and want life to be simpler, not more complicated.

8. Create Your Retirement Income Plan

Where will your retirement paycheck come from? Social Security, pensions, investments, and maybe part-time work all play a role. The key is figuring out how and when to tap each source so you are not leaving money on the table. Setting up a clear withdrawal plan gives you structure and confidence, knowing that your income will support your lifestyle for decades to come.

9. Run Through Your Budget in “Retired Mode”

Here is a fun experiment: live for a few months on the budget you expect to use in retirement. If you plan to live on 85 percent of your current income, cut back now and see how it feels. This test run shows whether your expectations match reality. If you find yourself dipping into more than expected, you will know it is time to adjust before retirement begins.

10. Secure Your Legal and Estate Affairs

It is not the most exciting task, but it is one of the most important. Make sure your will, power of attorney, and healthcare proxy are all up to date. Consider whether a trust makes sense for your family. Having these documents in place gives you and your loved ones peace of mind and ensures your wishes are carried out without confusion or conflict.

11. Visualize Your Post-Working Life

Retirement is not just about money—it is about meaning. Picture your days without work in the mix. Do you want to travel? Volunteer? Learn something new? Maybe you want to ease into part-time work. Thinking about what excites you makes the transition easier and helps prevent the “what do I do now?” feeling that some retirees face.

12. Test-Drive Retirement Routines

You do not have to wait until your first day of retirement to start living like a retiree. Try it out now with long weekends, shorter work weeks, or unstructured mornings. Experiment with hobbies, routines, or even travel plans. This trial run gives you a taste of what works and what does not, helping you shape your ideal lifestyle before you officially retire.

13. Stay Active, Engaged, and Learning

Retirement is not meant to be the end of the road—it is the start of a new one. Staying physically active, socially connected, and mentally sharp is key to enjoying your golden years. Whether it is exercise, volunteering, joining a club, or picking up new skills, the goal is to keep growing and thriving. Think of retirement not as slowing down but as redefining how you want to live.

Final Thoughts

If you are within one year of retirement, you are standing at one of life’s biggest crossroads. The steps you take now—financially, legally, and personally—will set the stage for the decades ahead. Retirement is not just about having enough money; it is about creating a life that feels purposeful, secure, and rewarding.

Baby Boomers have lived through a lot of change, from rotary phones to smartphones, and retirement is just the next exciting chapter. By stress-testing your finances, simplifying your life, and imagining how you want to spend your days, you can make sure this transition is less about worry and more about freedom.

So take a deep breath, check these boxes, and get ready. The best part of your journey might just be the one you are about to begin.