If you’re a decade or so away from retirement, you’ve likely begun giving serious thought to what this next chapter might look like. How will you manage the transition? Will you travel, pursue new interests, or spend more time with family and friends? Might you relocate—or continue working in some capacity? How could shifts in income sources affect your lifestyle?
When you start to consider the many moving parts, the process can feel overwhelming. But focusing on a few key areas now—while time is still on your side—can help bring clarity, reduce uncertainty, and position you for greater flexibility later.
Reassess your living expenses
Between now and retirement, you’ll likely revisit your spending assumptions multiple times—and you should. While commuting and other work-related expenses may decline, other categories can rise, particularly health care.
Begin estimating what your monthly expenses may look like in the early years of retirement, then refine those assumptions as your plans take shape.
According to a recent survey, 46% of retirees said they were “very confident” in their ability to meet basic expenses in retirement, while only 33% expressed the same confidence regarding health-care costs.¹ Closely tracking spending today can lead to more realistic projections—and fewer surprises—tomorrow.
Consider all your income sources
Start by estimating your Social Security benefit. The amount you receive depends on your earnings history and when you claim benefits. You can begin as early as age 62 (at a permanently reduced level), at your full retirement age (66 or 67, depending on birth year), or as late as age 70 for a higher benefit.
You can obtain personalized estimates at the Social Security Administration website (ssa.gov) and by creating a mySocial Security account. Review your earnings record carefully and address discrepancies promptly.
Next, take inventory of retirement assets and employer benefits—401(k)s, pensions, IRAs, and taxable investment accounts. Consider how much income these sources could reasonably generate. If married, incorporate your spouse’s assets and benefits as well.
Additional income streams—such as rental real estate or part-time consulting—can provide valuable flexibility and may allow you to delay portfolio withdrawals, keeping assets invested longer.
Pay off debt, power up your savings
With a clearer view of future income and expenses, shift your focus to strengthening your balance sheet.
Entering retirement with little or no debt—including a paid-off mortgage—can significantly reduce pressure on your cash flow and create more room to adapt if circumstances change.
At the same time, consider maximizing retirement contributions during what are often peak earning years. If you’re age 50 or older, catch-up contributions allow you to add even more: in 2026, up to an additional $8,000–$11,250 to a 401(k) (depending on age) and $1,100 to an IRA.
Manage taxes Strategically
Tax planning becomes increasingly important as retirement approaches. Thoughtful sequencing of withdrawals—from taxable, tax-deferred, and tax-free accounts—can meaningfully affect after-tax income.
Although many investors start with taxable accounts to preserve tax-deferred growth, required minimum distributions (RMDs) generally begin at age 73 (age 75 for those who reach 73 after December 31, 2032), regardless of whether the income is needed. Roth IRAs are not subject to RMDs.
If you work while receiving Social Security, earned income may cause a portion of your benefit to be taxable. Our Important Numbers resource outlines the applicable income thresholds.
For those with estate planning goals, it’s also essential to consider how income taxes and potential estate taxes could affect heirs.
Account for health & Long-Term care
Health care deserves special attention in retirement planning. The Employee Benefit Research Institute estimates that an average 65-year-old couple with median prescription drug expenses may need approximately $366,000 in savings to have a 90% chance of covering health care insurance premiums and out-of-pocket medical costs in retirement.2
Original Medicare (Parts A and B) covers only part of these expenses. Many retirees explore either:
- Medigap (supplemental) policies, which help cover deductibles and coinsurance, or
- Medicare Advantage (Part C) plans, which bundle Parts A and B (often with Part D) and may offer additional benefits. For more information, visit medicare.gov.
Long-term care is another major consideration, as Medicare and Medigap generally do not cover extended custodial care. Depending on family history, asset levels, and legacy goals, long-term care insurance or alternative funding strategies may be worth considering.
Only one in four American workers feel very confident about affording a comfortable retirement.¹ At Heritage, we take the complexity out of retirement planning and replace it with clarity, confidence, and a strategy built around your goals—so you can live well today and retire with confidence tomorrow.
Want to know whether you could retire earlier, spend more, relocate, or adjust your lifestyle with confidence? Curious how different Social Security or market scenarios might affect your plan?
We can model multiple “what-if” scenarios and show how today’s choices may shape tomorrow’s possibilities—so you can move forward with clarity and confidence.
1 Employee Benefit Research Institute, Consumer Confidence Survey 2025
