If retirement is five years away, you're not alone in wondering:

“Can I actually afford to do this?”

You’re close enough to picture more time, more freedom, more control over your schedule. But you're also close enough to realize this transition isn't just about stepping away from work. It's about stepping into a completely new financial reality.

And here's the truth:
​The last five years before retirement might be the most important window in your entire financial life.

This is the time to stress test your plan, fine-tune the numbers, and make sure you're walking toward retirement with your eyes wide open, not just hoping it all works out.

So… Are You Ready?

Let’s start with a simple but tough question:

How much income will you actually need?

Many people assume expenses will go down in retirement. No commute. Fewer work lunches. Maybe even a paid-off house. That’s great, if it happens.

But the reality? Expenses often stay the same or even increase, especially if you plan to travel, help with grandkids, take on a few new hobbies, or cover rising healthcare costs.

The better approach is to start with your current lifestyle and build out from there. What will you spend money on? What will go away? What new expenses will pop up?

If your budget today is $100,000 a year, don’t be shocked if you still need $85,000 or more in retirement.

What Will You Live On?

Once you have a ballpark for your expenses, the next step is to map out your income sources. That includes:

• Social Security (get your estimate from SSA.gov)
• Pensions or annuity income
• Withdrawals from 401(k)s, IRAs, or brokerage accounts
• Any rental income or real estate proceeds
• HSAs or other tax-advantaged accounts
• Required minimum distributions (RMDs) once you hit age 73

From there, you can calculate the gap between what’s guaranteed and what needs to come from your savings.

If there’s a shortfall, you still have time to fix it. You could boost your savings, delay retirement, or consider part-time work. Even small adjustments made now can make a big difference five years from now.

What About Longevity and Healthcare?

Most people don’t like thinking about long-term care. But five years out is the perfect time to ask:

• Do you have a family history of chronic illness?
• Would your spouse be financially impacted if you needed care?
• Is long-term care insurance worth exploring, or is there another strategy to protect your savings?

None of these questions are fun. But they're far better answered before a crisis, not during one.

Retirement Case Study: A Real-World Example

Let’s walk through an example to show how planning ahead makes a big difference.

Imagine someone who is 60 years old, earns about $200,000 a year, and has saved around $1.2 million for retirement.

They plan to retire at 65. Social Security is expected to help with part of their income, and the rest will come from their savings.

They estimate they’ll need to replace about 75% of that $200,000 salary to maintain their lifestyle, roughly $150,000 per year in retirement.

At first glance, it feels like they’re on track: solid income, strong savings, and government benefits on the way.

But when we look a little deeper, a few important questions come up:

• Will their savings last 25 to 30 years?
• Can they keep up with rising healthcare costs and inflation?
• Will Social Security provide enough support, or is there a gap?

In this case, even with a strong starting point, there’s still a shortfall between what they’ll need and what they’ve saved.

Here’s the good news:​
They still have time to close that gap, and there are multiple ways to do it:

• Boost savings contributions in the final working years.
• ​Downsize living expenses by moving to a smaller home or relocating to a lower-cost area.
• Delay retirement by even a few years to allow savings to grow and reduce the number of years those savings need to last.
• Explore part-time work or other income sources in retirement.
• ​Reduce discretionary spending to lower total income needs.

Even with a solid income and strong savings habits, early and accurate planning makes all the difference. Everyone’s numbers are different. Maybe you’ve saved more. Maybe you expect a different Social Security benefit. Or maybe your retirement timeline looks a little different.

How Will You Know If You're on Track?

If your numbers show that you're on track to retire in five years, that’s great news.

It means your preparation is paying off. You’ve likely built good habits, kept a strong savings rate, and invested consistently. Still, it’s not time to coast. Keep contributing where you can, rebalance your portfolio to match your time horizon, and make sure your income plan remains tax-efficient.

But if your analysis shows you’re not quite there yet, don’t panic.

You still have options. And the next five years can be incredibly productive if you approach them with clarity.

Here are a few areas to consider:

• Could you adjust your future lifestyle to reduce spending in retirement?
• Can you increase contributions to your retirement accounts over the next few years?
• Would part-time work in retirement give your savings more time to grow?
• Is delaying retirement by even one or two years a realistic way to improve your long-term outlook?

Sometimes, the best move isn’t dramatic. It’s simply buying more time.

Working a bit longer can mean more savings, higher Social Security benefits, and fewer years relying on your portfolio to do all the work.

The point is: this isn’t all-or-nothing. Retirement readiness exists on a spectrum, and small adjustments now can go a long way toward closing the gap.

The Bottom Line

If you want to retire in five years, don’t just wait and see what happens.

This is the time to test assumptions, run the numbers, and build in the flexibility you’ll need for real life, not just spreadsheet life.

You may be closer than you think. Or you might have some work to do. Either way, now is the time to find out while you still have options.

Got questions, comments, or feedback? Simply hit reply! We personally read and respond to every message.
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Thanks for being a part of MY Wealth Watch!
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​Keeping wealth in focus,

The MY Wealth Management Team