Why a 5-year runway
The Social Security, Medicare, and tax-planning moves that matter most cluster in the final 5 years. Healthcare bridge planning typically takes 2–3 years to settle. Roth conversion strategy benefits most when you have several years of lower-bracket room to execute. Rearranging asset allocation toward your retirement mix should be gradual (not a one-day flip on your last day of work). Long-term care underwriting gets materially harder after 65 — if you are going to buy a policy, age 58–63 is the window.
Households that wait until 6 months before retirement to do this planning end up with rushed Medicare decisions, tax-inefficient withdrawal patterns in year one, and an asset allocation that is either too aggressive (sequence risk) or too conservative (running out of money at 85). The 5-year runway is how professionals do it.
The expensive mistakes in years T-2 and T-1
Three errors we see consistently in the 24 months before retirement:
- Getting the Medicare enrollment date wrong. Miss the 7-month window and you pay a 10% permanent Part B premium surcharge — for life. Calendar it 3 months before your 65th birthday, set three reminders, and do it.
- Blowing the IRMAA cliff in your final earning year. A $1 overage past the threshold costs $2,000+ in extra Medicare premiums two years later. The MAGI inclusion of capital gains, deferred comp payouts, and vested stock can push you over. Plan cap-gain realization before the trigger year.
- Starting RMDs without a plan. If you have $1M+ in pre-tax accounts at 73, RMDs start at ~$37,700/year and grow. Not planning Roth conversions in your 60s means paying 22–32% marginal rate on that money plus IRMAA premiums on the MAGI it creates.
Each of those is preventable with a 3-hour planning session — typically with a flat-fee CFP in year T-3 or T-2.
The three 'do not wait until retirement' items
Some items are date-locked and cannot be recovered if you miss them:
- Long-term care insurance underwriting window: Coverage is cheapest and easiest to qualify for at ages 55–62. After a cancer diagnosis, stroke, or even some chronic conditions, you are uninsurable. Decide and act by T-3.
- Roth conversions at employed-income rates: Counter-intuitive but sometimes correct — if your final working year has an unusually low income (sabbatical, part-time transition), you can convert meaningfully at 12% or 22%. Model it both ways in T-1.
- Final 401(k) contributions: You lose access to the 401(k) deferral the day you stop working. Max it out in T-1 and T-0.
Everything else (estate docs, consolidation, beneficiary review) is improvable after the fact. These three are not.
How to use this checklist
Print the T-5 list in the first month of the year that starts your runway. Work on it monthly. Review the prior year's items at each transition (T-5 to T-4, etc.). Each item should be either checked off or have a note explaining why it does not apply.
Pair this with the Retirement Readiness Checklist (which is topic-organized rather than year-organized). They overlap intentionally — belt-and-suspenders on items that matter most.