Most retirement mistakes don't happen at retirement. They happen in the ten years before, and by the time the mistake shows up, the window to fix it has usually closed. After two decades of working with families through their final working decade, I've watched the same handful of moves consistently separate the people who land softly from the ones who don't.
Here are the four moves I think matter most. None of them are clever. None of them are sexy. All four of them require sitting down with someone who'll tell you the truth and doing the work, which is exactly why most people skip them.
Move 1: Map the income.
Stop thinking about retirement as a number. Start thinking about it as a paycheck. What's it going to take, every month, to live the life you want?
Most people answer that question wrong. They underestimate healthcare. They overestimate how much their lifestyle will scale down. They forget about the periodic large expenses (the new roof, the new car, the daughter's wedding) that don't show up on a monthly budget but absolutely have to be planned for.
The number you need isn't your nest egg. The number you need is the gap between your fixed income (Social Security, pension) and what it actually costs to live.Tony Burton
That gap is what your portfolio has to fill: every year, sustainably, for 30 years. Once you know that number, the rest of the planning gets a lot easier.
Move 2: Audit the tax picture.
This is the move almost everyone skips and almost everyone regrets. The decade between 55 and 65 is the most important tax-planning window of your life, and most people don't realize it until it's gone.
Three things to look at:
- Roth conversion opportunities in low-income years, before Social Security and RMDs start.
- Asset location: which investments live in taxable vs. tax-deferred vs. tax-free accounts.
- The 0% capital gains bracket, which is wider than most people think.
Done well, a coordinated tax strategy over the final working decade can meaningfully reduce lifetime taxes. Done poorly, you'll pay more than you needed to. The exact savings depend on your specific situation, so we model it carefully for each client. (Tax planning strategies do not constitute tax advice; consult your CPA or tax attorney.)
Move 3: Stress-test the plan.
Markets don't cooperate with your timeline. A bad first decade in retirement (what planners call "sequence of returns risk") can torch a portfolio that looked bulletproof on paper.
The stress test asks: what happens if the market drops 30% in your first year of retirement? What about three bad years in a row? What about a prolonged sideways market, like the decade following the 2000 tech-bubble peak, when U.S. large-cap indices delivered minimal price appreciation?6
If your plan can survive those scenarios, you can sleep at night. If it can't, you need to know now, while there's still time to make changes.
Move 4: Have the conversation.
This is the hardest one, and the most important. Sit down with your spouse, your kids, and your advisor (separately or together) and talk about what happens.
What happens if one of you needs long-term care? What happens to the estate? Who's in charge of the financial decisions if one of you can't make them? What do the kids know? What should they know?
Most families don't have these conversations. The cost of not having them shows up later, in family conflicts and estate disputes and decisions that have to be made under emotional duress because they weren't made under calm ones.
None of these four moves is hard, technically. The hard part is sitting down and actually doing them. If you're inside the final working decade and you haven't worked through these — that's the conversation to have. Soon.