The Five Years Before Retirement Playbook
A practical five-year plan for turning a collection of pensions, investments and good intentions into a retirement strategy you can actually rely on.
The final years before retirement are not just about saving as much as possible.
They are the period when you can test the numbers, strengthen weak areas, organise the assets and remove avoidable surprises before employment income stops.
- Give each of the final five working years a clear job
- Test your retirement spending and income before relying on them
- Coordinate pensions, investments, tax, cash and retirement timing
What's in the guide?
The final five years can be more important than the final five months
A surprising amount of retirement planning happens too late.
Someone works for decades, builds pensions and investments, then starts asking the difficult questions when retirement is only a few months away.
Can I actually afford to stop?
Where should the income come from?
How much cash should I keep?
Should I take pension income immediately?
What happens if markets fall?
How will tax change when the salary stops?
Where am I going to live?
The closer you get to retirement, the fewer options you may have to correct a weak plan.
Five years gives you time.
Time to understand what retirement will cost.
Time to identify whether there is an income gap.
Time to increase savings if needed.
Time to restructure unnecessary debt.
Time to review investment risk before the portfolio becomes the main source of income.
Time to organise pensions and investment accounts around the retirement plan rather than around the employment years in which they were accumulated.
And importantly, time to test whether the retirement you have imagined actually works financially before handing in your notice.
The purpose of the final five years is therefore not simply to maximise the portfolio.
It is to remove avoidable surprises before the salary stops.
Who is this guide for?
This playbook is designed for people who are roughly five years or less from retirement and want to turn their accumulated wealth into a practical retirement plan.
It may be particularly useful if you:
- are aiming to retire within the next five years
- have pensions and investments but are unsure whether you have enough
- want to retire earlier than originally planned
- have several pension accounts or investments across different countries
- need to work out where retirement income will come from
- want to reduce the risk of a large market fall disrupting your retirement date
- expect State Pension, Social Security or defined benefit income to start later
- plan to move country when you retire
- want to organise tax and withdrawals before employment income stops
- would like to test retirement spending while you still have time to make changes
The closer retirement gets, the more valuable coordination becomes.
Give each of the final five years a job
The playbook uses a simple sequence.
5 years to go: DEFINE
What does retirement actually look like?
Where will you live?
What will you spend?
What are you retiring to, not just from?
4 years to go: MEASURE
Bring the numbers together.
Pensions.
Investments.
Property.
Secure income.
Expected spending.
One-off costs.
Now test whether the plan works.
3 years to go: STRENGTHEN
Fix the weak points while salary is still coming in.
Increase savings if needed.
Review debt.
Build liquidity.
Check protection.
Make sure investment risk matches the approaching change in circumstances.
2 years to go: COORDINATE
Decide how the assets will eventually work together.
Which income starts first?
Which accounts may fund the early years?
Where does tax fit?
What currencies will you need?
1 year to go: REHEARSE
Try living on the expected retirement budget.
Build the cash structure.
Finalise the withdrawal plan.
Check the practical details before employment income stops.
First year retired: ADJUST
Compare the plan with reality.
Actual spending.
Actual withdrawals.
Actual markets.
Actual tax.
Then adapt.
A good retirement plan is built before the salary stops, then refined once real retirement begins.
Frequently asked questions
When should I start planning seriously for retirement?
Earlier is useful, but the final five years are particularly important because retirement changes from a distant objective into a practical financial transition. You still have time to correct gaps, reorganise assets and test the plan before employment income stops.
What should I do five years before retirement?
Start by defining the retirement you actually want, then calculate the likely spending, secure income, pensions, investments and one-off costs. This establishes whether the current plan is on track and where changes may be needed.
Should I reduce investment risk before I retire?
Potentially, but retirement planning is not simply about moving everything into cash or bonds. The portfolio still needs to support a potentially long retirement. The right level of risk should consider spending needs, secure income, cash reserves, time horizon and how flexible withdrawals can be.
How much cash should I hold before retirement?
There is no universal amount. Cash should be linked to near-term spending, known capital costs and the role it needs to play during poor markets. Holding too little can create pressure to sell investments at the wrong time, while holding too much can reduce long-term growth.
Should I take my pensions as soon as I retire?
Not necessarily. The timing of pension income should be considered alongside other assets, tax, secure income and future spending. In some plans, different accounts can be used at different stages of retirement.
Is it worth practising my retirement budget before I stop work?
Yes. A rehearsal can reveal whether the expected spending is realistic while you still have salary coming in and time to make changes.
About Josh Clancey
Josh Clancey is a cross-border financial planner based in Dubai, working with internationally mobile professionals and families as they approach and move through retirement.
His approach focuses on turning pensions, investments, tax, cash flow and future lifestyle plans into one coordinated retirement strategy.
The final years before retirement are particularly important because there is still time to fix weaknesses, test assumptions and make changes before the portfolio becomes responsible for funding day-to-day life.