You’ve been diligently saving for retirement for decades, and now that last day of work is getting closer. As you start dreaming about spending weekdays golfing and summers traveling, you may also begin to wonder if you should be doing something different with your money.

When you’re 10 years from retirement, it’s typically time to start getting more precise about your savings goals and how you’ll generate income once you stop getting a paycheck from work.

“When you’re 25, we’ll make an estimate for what you might spend in retirement,” says Matt Shapiro, CFP®, a member of the Advice Practice team with Northwestern Mutual. “But for someone who is five or 10 years out, we have more clarity. We'll also have an idea of where they are with their investments and how much they're likely to have if they keep saving at the same rate."

That additional clarity allows you to do a more comprehensive evaluation of where you’re at and where you’ll be when you retire. Here are some things you should do as you approach retirement to make sure you're on track.


Hopefully you’re already meeting with your financial advisor regularly. But 10 years before you retire is a good time to start diving deep into the details of your retirement plan.

Count everything — including any pensions, 401(k)s, IRAs, insurance plans, investment accounts, real estate investments, bank accounts, health savings accounts and even your expected Social Security payouts, says Shapiro. Your advisor can provide a good estimate of how much you’re likely to have when you plan to retire and how much income you’ll be able to reliably generate.

Once it’s all counted, it’s time to build your retirement budget. This is where you get to dream about all the things you want to do in retirement. Will you take a few big trips over the course of your retirement, or do you plan to go on two trips a year? Start to home in on what you’ll want to spend. Will the income you generate support the life you want in retirement?

If estimates of what you’ll have and what you’ll need don’t line up, a decade is usually enough time to make some changes. Shapiro says if you have some ground to make up, you really have three options: cut expenses, work longer or look to make more money. Most people do a combination of those three things, says Shapiro.


As you get closer to retirement, your investments should shift to protect against downturns in the market that could endanger your retirement savings. “Someone who is 10 years away from retirement today will want to make sure that their asset allocation is more conservative than when they were younger,” says Shapiro.

Ten years before you retire is a good time to start diving deep into the details of your retirement plan.

This could include shifting more of your assets to bonds over stocks. You might also want to consider taking some of your stock gains and buying an annuity, which will provide guaranteed income that you can’t outlive and that won’t be affected by the market.


As you get closer to retirement, say, five years away, it’s time to update your budget again. “At that point, you have a pretty decent idea of how much you’re going to be spending every year,” says Shapiro. “It’s important to start running those numbers regularly and seeing whether you’ll be able to support the withdrawals that you’ll need to cover those expenses.”

It’s also important to make sure that your retirement budget will work – with a little firsthand experience.

“I’m a big fan of practicing your budget before it becomes a reality,” says Shapiro. “If someone’s planning on living off a certain amount of money at retirement, and they’re living off more than that pre-retirement, I would definitely want them to take a test run for three months to see if it’s realistic or not so that they can adjust their budget if necessary.”


When you spend time preparing your finances for retirement, you can take a big worry off the table as you approach the day you stop working. You’ll know how you’re going to pay for it, so all that will be left is to simply live life with all the new time you have to enjoy it.

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