Mike Crews | Nov 03 2026 13:45

Retiring in the Next 5 Years? Financial Decisions You Should Make Now

As retirement approaches, the focus shifts from building assets to coordinating income, taxes, investments, health care, and legacy wishes. A thoughtful plan can help you identify the decisions that deserve attention before employment income ends and circumstances become more difficult to change.

For much of your working life, retirement planning may have meant saving consistently and investing for the future. As retirement gets closer, the questions become more personal: How will daily expenses be covered? Which resources should be used first? How might taxes, health care, and family priorities affect the plan?

At Forum Advisory Services, LLC, we help individuals and families in Columbia and throughout mid-Missouri consider how these moving pieces may fit together. Here are key areas to address as you prepare for the transition.

Clarify What Retirement May Cost

Retirement readiness is not defined by an account balance alone. It begins with understanding the lifestyle you hope to support and the expenses that may continue, change, or arise unexpectedly.

Separate essential spending, such as housing, insurance, food, transportation, and health care, from flexible goals such as travel, gifts, hobbies, charitable giving, or home projects. This can help reveal which portions of your plan require dependable income and where you may have flexibility if circumstances change.

A retirement budget is not a promise about the future. It is a starting point for meaningful conversations about priorities, inflation, unexpected needs, and the tradeoffs that may come with different retirement dates.

Create an Income Plan Before Your Paycheck Ends

Retirement income can come from several places, including Social Security, pensions, retirement accounts, taxable investments, business interests, real estate, or other arrangements. The important question is not only what resources you have, but how they may work together over time.

Different account types can carry different tax treatment, withdrawal considerations, and roles in a broader plan. The timing of a withdrawal may affect taxes, future flexibility, and the assets available later in retirement.

Forum Advisory Services, LLC takes a coordinated view of retirement income planning so clients can better understand how expected cash flow, spending needs, and investment decisions relate to one another.

Consider Your Social Security Choices in Context

Choosing when to claim Social Security is an important retirement decision, but it should not be made in isolation. Your health, career plans, household income needs, investment resources, and marital situation can all influence the role benefits may play.

For couples, the decision can be especially important because claiming choices may affect the income available to a surviving spouse. Rather than focusing only on a monthly benefit comparison, consider how Social Security coordinates with your anticipated retirement date, withdrawal approach, and long-term priorities.

Because benefit rules can change and personal circumstances vary, reviewing your options with qualified professionals can provide useful perspective.

Look for Tax-Aware Planning Opportunities

The transition from employment to retirement can change the way income is taxed. In some situations, the period after leaving work may create an opportunity to reassess withdrawals, traditional and Roth account balances, charitable giving plans, capital gains, and future required distributions.

Tax-aware planning is not about predicting every future tax outcome. It is about recognizing that a decision made today may have consequences beyond the current year. For example, a withdrawal or conversion strategy may affect taxable income, health care costs, and estate planning objectives.

Forum Advisory Services, LLC encourages clients to coordinate these discussions with their tax professional so planning reflects the full picture rather than a single account or tax return.

Align Investments With the Retirement Transition

As you move from contributing to accounts toward taking withdrawals, your investment strategy may need to evolve. Retirement can create a need for liquidity and stability while also requiring long-term growth to help address inflation and longevity.

Market declines can be more challenging when withdrawals are occurring at the same time. That does not automatically mean moving everything into cash. It means reviewing whether your investments, cash reserves, and risk exposure align with the role each asset is expected to play.

It is also wise to evaluate whether too much of your wealth is concentrated in a particular company, industry, or investment. Your portfolio should support the retirement you want to live, not simply reflect the path that helped you accumulate assets.

Prepare for Health Care and Extended-Care Needs

Health care deserves early attention, particularly if you expect to leave employer-sponsored coverage before becoming eligible for Medicare. Available options, enrollment requirements, premiums, and out-of-pocket costs can vary significantly depending on your circumstances.

Planning should also consider the possibility of a long-term care need. This does not necessarily mean a particular insurance solution is right for everyone. It means discussing how a significant health event could affect your household, your preferred care setting, family responsibilities, and retirement resources.

Addressing these questions before retirement can give you more time to compare options and make decisions without unnecessary pressure.

Update Estate and Incapacity Planning

Retirement planning also involves preparing for life’s unexpected changes. Review beneficiary designations, wills, trusts, powers of attorney, and health care directives to make sure they still reflect your wishes.

Both spouses or partners should understand the household’s financial arrangements and know how to locate important documents. A well-coordinated estate plan can help loved ones manage responsibilities during incapacity or after a death while keeping your priorities at the center.

Forum Advisory Services, LLC can work alongside your attorney and other professionals to help ensure retirement, investment, and estate planning decisions are considered together.

Bring the Decisions Together

Retirement decisions are connected. The timing of retirement can influence income sources. Income choices can affect taxes. Tax decisions can shape investment withdrawals and the assets ultimately available to family or charitable causes.

A comprehensive planning process can help you see these connections more clearly. The goal is not to create certainty in an uncertain world; it is to develop a flexible framework that reflects your lifestyle, values, and evolving needs.

FAQ

What should I review before retiring?

Focus on anticipated spending, income sources, investment risk, tax considerations, health care coverage, and estate planning documents. Reviewing them together can reveal important connections and potential gaps.

Should I change my investments as retirement approaches?

Possibly, but the appropriate approach depends on your time horizon, income needs, liquidity needs, and comfort with market fluctuations. Retirement often calls for a balance between accessible assets and long-term growth potential.

When should I claim Social Security?

There is no single answer. Your health, employment plans, other income sources, marital circumstances, and broader retirement strategy can all matter.

How can I plan for health care after leaving work?

Review available coverage options, expected costs, enrollment requirements, and the transition to Medicare well before leaving employer coverage. Consider discussing long-term care needs as part of the same review.

Do I need professional guidance before retirement?

Not every household has the same needs. However, professional guidance may be helpful when you want to coordinate investments, retirement income, taxes, health care, and estate planning with a clearer view of how each decision may affect the others.

Important Information: This article is for general educational purposes only and is not individualized investment, tax, insurance, or legal advice. Investing involves risk, including possible loss of principal. Consult qualified professionals regarding your specific circumstances.