What Should I Do 5 Years Before Retirement?

Five years out is not too late. You do not need a perfect plan today. You need a short list of concrete steps that lower your stress and make the numbers clearer. Start by locking down when your government benefits can start, building a small cash cushion so market swings do not scare you, and trying your retirement budget now while you still have a paycheck to lean on.

Write Down Your Benefit Start Dates

This is the single most useful thing you can do in the next month.

If you are in the US, you can start Social Security as early as age 62, but your full retirement age is 67 if you were born in 1960 or later. Starting early means a permanently smaller check every month. You can see your estimated benefit and exact dates at ssa.gov.

If you are in Canada, you can start the Canada Pension Plan (CPP) at 60, though taking it before age 65 shaves a percentage off every month for life. Old Age Security (OAS) can start at 65, and you can delay it to 70 to earn a larger monthly payment. Check your statements at canada.ca.

Write the two dates down: the earliest you could start, and the date you actually plan to start. That gap matters. It tells you exactly how many years of savings you need to cover before a government check arrives. If that gap is long, our guide on retiring early when benefits start later walks through how to fund those years without draining your nest egg too fast.

Save a Two-Year Cash Cushion

You do not need a 10-year cash pile. You need roughly 24 months of spending sitting in a regular savings account or a guaranteed income certificate (GIC, a fixed-rate deposit in Canada) so a bad market year does not force you to sell investments at a loss.

Worked example, for a one-person budget:

• You think you will spend about $4,000 a month in retirement.
• $4,000 × 24 months = $96,000.
• That is the cushion target. You can build it inside or outside your retirement accounts; most people keep it in a plain savings account for easy access.

If you have $30,000 saved already and five years to go, you need another $66,000. Spread over 60 months, that is $1,100 a month. Tight but doable, especially if your house payment shrinks (more on that below).

Shrink or Clear Your Mortgage

A house payment is often the biggest line in a retirement budget. If you can knock it down or off before you quit, you cut your monthly spending need permanently.

You do not have to be debt-free to retire. But five years gives you time to redirect extra cash toward the principal, refinance to a shorter term, or at least lower the payment. A quick math check: if your payment is $1,800 a month, removing it drops your required retirement spending from $4,000 to $2,200. That changes how much you need to save, not by a little. It changes the whole picture. See how that plays into how much you actually need to retire.

Other debt: credit-card balances and car loans should ideally be gone before you lose your W-2 or paycheque. A fixed, low-rate mortgage is a different story. There is no rule that says you must be debt-free. The rule is to know what your monthly obligation will be when you have no paycheck.

Practice Your Retirement Budget Now

Spend on paper what you think your retired life costs. Then spend on real life, for three months, while still working. Cut subscriptions you will not keep. Try the grocery plan, the travel pace, the hobbies.

This step catches surprises. Maybe your "simple retirement" actually needs $5,200 a month because of property taxes, insurance, and one medical copay line you forgot. Better to find that with a paycheck still landing than after you have handed in your resignation.

Line Up Health Coverage for Any Gap Year

In the US, Medicare eligibility starts at 65. If you plan to quit at 60, you have five years without employer coverage. That gap can be expensive, and the rules for private-market health plans change. Read the basics at medicare.gov and think through options before you give up group insurance.

In Canada, provincial coverage does not stop when you retire, so the gap problem is smaller. But you may lose supplemental drug or dental coverage tied to a workplace plan. Ask your benefits office what ends the day you stop working.

One Last Savings Push (If You Want It)

Five years is a real runway if you still have a steady income. You are not starting from zero and you do not need a magic number.

Here is a simple view for a US worker using a 401(k), a workplace retirement plan where you put pre-tax pay into investments:

Step	Math	Result
Current balance	You look at your statement	$180,000
Monthly contribution	You raise it by $600	$600 × 60 months = $36,000
Employer match	50% on the first 6% of pay (example)	Roughly $200 × 60 = $12,000
Growth, about 5% a year	Rough, not a promise	~$30,000 on that stretch
Projected balance in 5 years	$180,000 + $36,000 + $12,000 + $30,000	~$258,000

That is a round-number sketch, not a forecast. Markets do not care about your spreadsheet. The point is the shape of the arithmetic: a modest monthly bump, combined with an employer match and a few years of time, moves the needle more than people expect.

If the numbers above still leave you staring at a blank screen, When Can I Retire does this math for you. You upload a statement or type in a few numbers, and it works out the age you can retire and how ready you are today. It counts Social Security or CPP and OAS, any pension, taxes, inflation, and the years before benefits kick in, and shows every step. The first check is free.

Check Accounts, Beneficiaries, and a Retirement Budget Plan

Two hours with a kitchen table and a pen:

• Log into every account. Retirement plans, savings, pensions, any old 401(k) from a job you left ten years ago. List them. You cannot plan around money you forget exists.
• Update beneficiaries. A divorce, a new marriage, a new child. If the paperwork still says your ex, the money goes to your ex. Period.
• Write down where the passwords live. A shared notebook in a fireproof box beats a vault nobody can open in a weekend.
• Set a target spending number. You will refine it after your three-month budget practice. Just get a first number down.

You are not fixing your whole life this year. You are tightening the bolts that are loose so the last five years go calmer.