7 things you need to do the decade before you retire

Retirement is a major step, not only in your life but with your finances. If you plan to retire in the next decade, it is essential to help ensure you’re going into retirement fully financially ready. These are seven things you need to do in the decade before you retire.

What you’ll learn:

• 1) Determine when the time is right
• 2) Take aim at your retirement target
• 3) Maximize your nest egg
• 4) Get a portfolio checkup
• 5) Create a Social Security strategy
• 6) Build a retirement income stream
• 7) Look beyond the money

1) Determine when the time is right

One of the first things you’ll need to do in the decade before retirement is determining exactly when you plan to retire. Many people have a rough estimate of this, but research shows many people’s plans don’t match their eventual reality—for better and for worse.

According to Morningstar Investment Management:

• People who plan to retire at 55 retire at 58 on average
• People who plan to retire at 65 retire at 63 on average

Reasons why many people retire later than expected include the cost of healthcare (especially given Medicare doesn’t start until 65), a nest egg that’s not big enough yet and higher than anticipated expenses. Conversely, reasons people retire earlier than expected include poor health, unemployment and meeting their financial goals early.

Ultimately, 61-65 is the most common age range for Americans to retire, followed by 55-60 and 66-69. The right choice for you will depend on your personal wishes along with your financial means.

2) Take aim at your retirement target

“How much do I need to retire” is the central question most aspiring retirees are looking to answer. There are three rules of thumb you can use to help determine your number.

First, save enough to generate 70-90% of your pre-retirement income. Why this range? Certain costs typically go down in retirement. For example, you may have paid off your mortgage. Additionally, a portion of your income while working goes towards saving for retirement. You don’t need to save for retirement when you’re retired!

Next, save a multiple of your salary based on your age. Fidelity’s rule of thumb is to save 1x your salary by age 30, 3x by age 40, 6x by 50, 8x by 60, and 10x by 67. For example, if your salary is $50,000/year at age 40, your goal should be $150,000 saved for retirement. Keep in mind this is a rule of thumb and doesn’t account for factors like a large income jump as your career progresses

. Finally, save enough to generate a 4% withdrawal rate. This means you can withdraw 4% annually from your retirement portfolio and have a low risk of depleting your portfolio during retirement.

3) Maximize your nest egg

Saving enough to retire can feel like a daunting prospect but taking advantage of work-sponsored and tax-benefited retirement plans can make a huge difference. These plans can boost your savings and make building your nest egg much easier.

For example, many workers have access to a 401(k) plan through their employer. In 2025, employees can contribute $23,500 to this plan annually. Plus, you can participate in catch-up contributions starting at age 50, allowing for an additional $7,500 in contributions for a total of $30,000 annually.

On top of a workplace 401(k), many people are eligible to contribute to an Individual Retirement Account (IRA), up to $7,000 annually as of 2025 with additional catch-up contributions of $1,000 annually. The potential impact of these tax-advantage accounts over time can’t be overstated.

4) Get a portfolio checkup

The makeup of your portfolio near retirement has a huge impact on your retirement readiness. Traditionally, stocks give a higher average annual return than bonds, but they are significantly more volatile. If the stock market happens to crash near your expected retirement day, you may no longer have enough assets to retire.

Holding a mix of stocks and bonds can avoid this issue, as bonds tend to be more stable. This way, you are likely to retain most of your portfolio’s value, while still holding some stocks that can grow in your retirement.

Getting a portfolio checkup with a financial consultant can help ensure your portfolio is optimally balanced for growth and stability. They can also give you reassurance that your overall retirement plan is financially sound.

5) Create a Social Security strategy

Besides your own assets, Social Security is a large part of many people’s retirement strategy. Creating a Social Security strategy and aligning it with your overall retirement plan is essential.

Despite concerns Social Security might “go away” in the future, this is unlikely. The much more likely scenario is modest adjustments made to the program, though no one can say for sure what exactly those adjustments will be.

The most important decision you’ll need to make with Social Security is when to begin receiving it. Social Security benefits are based on your full retirement age (FRA), but you can take Social Security slightly earlier or later. Taking it earlier allows you to receive Social Security payments sooner, but the payments will be smaller. Taking it later is the opposite: Larger payments, but you’ll have to wait until you are past your FRA to receive them.

6) Build a retirement income stream

Retirement income streams generally come in two forms. There are income-generating investments and systemic withdrawals, each of which can have a place in your overall retirement plan.

Income-generating investments include options such as money market savings accounts and certificates. These provide direct income without risking the initial principal amount but come with the downside of not providing a high rate of return.

Conversely, systematic withdrawals involve withdrawing a certain dollar amount from an investment portfolio at regular intervals. This can often produce more income than income-generating investments, but the investments can vary in value, and you should be careful to ensure your portfolio will last for your entire retirement.

7) Look beyond the money

While money is clearly important to retirement, it isn’t everything. It’s important to consider other factors that can have a big impact on your happiness in retirement: Health, friendships and family. Focusing on these factors before entering retirement is much more likely to impact happiness than money alone.

It’s also important to create an active plan for what you would like to do in retirement. This can be anything from traveling, to spending more time with friends and family, to volunteering or any number of other activities that you find meaningful.

Retirement is a major milestone, and it’s worth taking the time to get it right. Consider working with a financial consultant to help you plan. Following these seven things to do before you retire will set you up for financial success and a fulfilling retirement.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. The information is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal professional.