05/07/2026
The 5 years before you retire are the most financially dangerous of your life.
Not the years after. The years before.
Why? Because almost every decision you make in that window has compounding consequences for the next 30 years. Get them right, and retirement is a victory lap. Get them wrong, and you spend your 70s wishing youโd done things differently.
After working with clients for years, here are the 5 most expensive mistakes I see people make โ and what to do instead:
๐. ๐๐ฅ๐๐ข๐ฆ๐ข๐ง๐ ๐๐จ๐๐ข๐๐ฅ ๐๐๐๐ฎ๐ซ๐ข๐ญ๐ฒ ๐ญ๐จ๐จ ๐๐๐ซ๐ฅ๐ฒ
Claiming at 62 instead of 70 can cost you over $100,000 in lifetime benefits, sometimes much more. Yes, there are good reasons to claim early (health issues, immediate income needs), but most people do it out of fear or habit. Run the math first.
๐. ๐๐ ๐ง๐จ๐ซ๐ข๐ง๐ ๐๐จ๐ญ๐ก ๐๐จ๐ง๐ฏ๐๐ซ๐ฌ๐ข๐จ๐ง ๐ฐ๐ข๐ง๐๐จ๐ฐ๐ฌ
Thereโs a magic window between retirement and age 73 (when RMDs kick in) where your taxable income often drops dramatically. Thatโs the cheapest time youโll ever convert traditional IRA dollars to Roth. Skip this window, and youโre handing the IRS money you didnโt need to. Worse โ when one spouse passes away, the survivor gets pushed into single-filer brackets and the tax bill explodes. Roth conversions help solve for that, too.
๐. ๐๐จ๐ฅ๐๐ข๐ง๐ ๐ญ๐จ๐จ ๐ฆ๐ฎ๐๐ก ๐๐จ๐ฆ๐ฉ๐๐ง๐ฒ ๐ฌ๐ญ๐จ๐๐ค
If youโve worked at the same company for 25 years, thereโs a good chance more of your net worth is tied to that one stock than you realize. Iโve seen people walk into retirement with 40, 50, even 60% of their portfolio in their employerโs stock. One bad earnings cycle can rewrite your retirement plan. Concentration built your wealth. Diversification protects it.
๐. ๐๐จ ๐ญ๐๐ฑ ๐ฉ๐ฅ๐๐ง
Most people have an investment plan. Very few have a tax plan. Theyโre not the same thing. A real tax plan answers: Which accounts do I withdraw from first? When do I trigger capital gains? How do I manage my Medicare premiums (IRMAA)? When do I do Roth conversions? Without a plan, youโll likely overpay in taxes by tens or even hundreds of thousands of dollars over your retirement.
๐. ๐๐ข๐ง๐ ๐ข๐ง๐ ๐ข๐ญ
This is the big one. Most people spend more time planning a two-week vacation than they do planning a 30-year retirement. They assume theyโll โfigure it outโ when the time comes. But the 5 years before retirement are when the planning has to happen โ not after youโve already pulled the trigger. Once you retire, your options narrow fast.
