I'm a Financial Advisor: The First Money Moves I’d Make the Year Before Retirement
You spent decades building your nest egg. Now comes the hard part: making sure it actually works for you. The year before retirement isn't about panicking — it's about precision. This 12-month window is your last chance to stress-test the plan while you still have a paycheck to adjust it.
Financial experts agree: the decisions you make now will define whether retirement feels secure or stressful. Here's what needs to happen before you hand in your notice.
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First, Build a Retirement Cash-Flow Plan
Before you make any changes to investments, Christopher Stroup, a certified financial planner (CFP) and owner of Silicon Beach Financial, recommended first creating a detailed retirement cash-flow plan.
“I’d want to know exactly how much I expect to spend, which income sources will cover those expenses and where the gaps are,” he said.
That information becomes your roadmap when deciding how much to save, invest and keep liquid. Once you know the number, you can stress-test for inflation, healthcare surprises and market downturns. And separating essential expenses from discretionary ones shows you where you can actually cut if needed.
Close the Gaps
Mapping out your expected retirement spending against reliable income a year before retirement gives you time to make adjustments. If the numbers reveal an income gap, you still have options: save more, cut expenses, reconsider Social Security timing or push back your retirement date.
For example, Stroup said, someone expecting to spend $80,000 annually but with only $60,000 in reliable income has a $20,000 annual gap to address. And once the paychecks stop, your options get a lot thinner.
Aggressively Pay Off Debt
Johnathan Ness, a certified public accountant (CPA) and owner of Know Money, Yes Money, suggested focusing on entering retirement debt-free, including paying off the mortgage. Eliminating large monthly payments reduces how much retirement income your portfolio needs to produce.
As Ness put it, for a hypothetical couple carrying a $2,000 monthly mortgage, removing that mortgage reduces the amount they need to draw from savings from $36,000 to more like $12,000 annually.
However, paying off a mortgage isn't necessarily the right move for every retiree. Ness noted a potential exception for someone with a very low mortgage rate who expects to pay it off within five years of retirement.
Make Sure You Have Enough Accessible Cash
The year before retirement is also the time to decide how much money needs to remain liquid. Rather than relying on one universal number, Stroup would tie the cash reserve to the retiree's actual spending plan, reliable income and upcoming large expenses.
“I generally want enough liquid assets to cover near-term spending needs and known large expenses without forcing someone to sell investments at an unfavorable time," he said. "The right amount depends on income reliability, portfolio size, spending needs and risk tolerance.”
This cushion matters more than you'd think. It protects you from having to sell stocks during a market downturn right after you retire — exactly when you can't afford the hit.
Factor in Social Security
Social Security shouldn't be a separate decision. It's part of your cash-flow puzzle. Claiming early gets you money sooner; delaying bumps up your monthly benefit. The right choice depends on your household spending, other income, how long you expect to live and spousal benefits.
Stress-Test Your Plan
Finally, make sure the budget reflects what retirement may actually cost. Stroup recommended accounting for property taxes, insurance, home maintenance, travel and family support, while Ness flagged long-term care costs that Medicare and conventional health insurance generally don't cover. Better to discover gaps now than six months into retirement.
The Bottom Line
A year before retirement isn't the time for a complete overhaul. It's the time to make sure the numbers actually align while you can still adjust them. Run the stress tests, close the gaps and tackle the debt. That paycheck in your account right now? It's your last real tool for building a retirement that doesn't feel precarious.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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