Finance Experts Are Begging You To Stop Doing These 9 Things 5 Years Before Retirement

Beth Ann Mayer

August 25, 2025 7 min read

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Retirement requires providing a soft landing spot so you can take off on your next adventure. As with a vacation, some advanced planning can go a long way for such an occasion. Financial experts consider the five years before retirement as (number) crunch time.

"If you're five years out from retirement, you're on the runway," explains Kate Ashford , NerdWallet's investing specialist. "You're approaching a major life change, and the things you do in these five years can have a big impact on your retirement years . You have to make sure you have a clear plan and that you're making good decisions."

For some, good decisions will mean breaking some bad habits. Financial experts are begging people to stop doing these nine things five years before retirement. And they share more than two cents on why. Scroll on—consider it an investment in your time.

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9 Things To Stop Doing 5 Years Before Retirement, Financial Experts Warn

1. Ignoring your actual spending

" Budget " can feel like the dirtiest B word ever. However, financial experts note that avoiding one can leave you seeing green—as in envy for the life you thought you'd have in retirement.

"Many people stop paying close attention to their actual spending , assuming they'll 'figure it out' once the paychecks stop," explains Hanna Kaufman, CFP , a certified financial planner at Betterment . "This is risky because without a clear picture, you may either overspend in the early years or pull back too much out of fear."

She suggests test-driving a retirement budget today by living the lifestyle you anticipate having.

"Track where the money really goes, and make adjustments while you still have a paycheck to lean on," she shares. "This way, you'll enter retirement with both confidence and realistic expectations."

2. Accumulating stuff

Since we're on the subject of spending...

"Stop accumulating stuff," Ashford begs. "You're at the peak of your career and possibly peak salary, but avoid using it to buy things you don't need."

She points out that you're nearing a time when you may want or need to downsize, and things can add more than dust to a home, but also stress to a move.

3. Investing like you're still 35

Raise your hand if you want to retire and watch a down market slash your savings. Pam Krueger , the founder & CEO of Wealthramp , notes this advice can't wait for the crickets to stop.

"If most of your portfolio is still in high-risk growth stocks, or you just haven't been paying attention to how you're positioned across multiple 401(k)s or coordinated your portfolio allocation with your spouse or partner's, you could be setting yourself up for a painful hit right before you need these investments to live on," she explains.

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4. Engaging in literal emotional investing

Try not to live and die by the market—emotionally, financially or by emotionally investing your finances.

"Making impulse investment decisions can jeopardize your retirement savings and hinder your financial goals," says Deryck Gryne , a financial advisor at Ally Invest. "Instead, develop a well-thought-out investment plan that aligns with your risk tolerance and retirement goals

For instance, hold off on transferring stocks to cash after the market has (another) "historically down week." Instead, Krueger suggests getting a gut-check from your financial advisor. You can discuss ways to diversify your investments to help you weather the stock market storm while maximizing growth potential.

5. Taking on debt

Five years before retirement is not the time to take on debt, especially high-interest varieties like credit cards and personal loans.

"Debt can significantly impact your retirement savings and cash flow, making it harder to maintain your desired lifestyle through retirement," Gryne warns.

6. Ignoring debt

No, we're not done with debt . Kaufman warns that people too often assume that debt will "work itself out" when they retire. It sounds nice, but it's a form of magical thinking.

"Carrying high-interest balances, or even a large mortgage, into retirement can drain your cash flow and limit flexibility," she says. "The alternative is to prioritize paying down high-cost debt now and decide whether it makes sense to accelerate your mortgage payoff."

And it sets you up to enjoy another kind of payoff.

"By reducing debt, you can enter retirement with greater financial freedom and peace of mind," Gryne adds.

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7. Stop delaying your Social Security decision

Social Security isn't the most exciting term, and reminders of your eligibility can make you feel like you're getting older. However, experts say it's best to embrace and crunch the numbers.

"If you haven't run the numbers yet on the benefits you'll get at each claiming age, you're flying blind," Ashford says. "At the very least, log into your account at ssa.gov—or create an account if you don't have one already—and look at your benefit estimates."

She explains that taking this small step can help you set a goal for how long you want or need to work before claiming your Social Security benefits.

"You might not make it that far—a lot of people have to retire before they'd planned to—but it's a good exercise," she shares.

8. Overlooking tax planning

Like budgeting and Social Security, tax planning isn't the most fun aspect of retiring. Yet, it can help ensure your dreams are within your means. Krueger notes that it's easy to forget that retirement withdrawals can trigger tax hits, especially if most of your money is in a tax-deferred account, such as a 401(k).

"Now's the time to align your investment strategy with your financial and tax planning," she emphasizes. "Start looking at ways to diversify your tax buckets now. This could mean partial Roth conversions, strategically realizing capital gains or adjusting which accounts you draw from first."

She says that having this plan in place gives you the flexibility to manage your taxes each year throughout retirement.

9. Neglecting your health

"Your health is your wealth" is not a cliche.

"If you're ignoring a health issue, things can worsen in retirement," Ashford notes. "Set healthy habits that will help you tackle your golden years in good shape , physically and mentally... If you don't exercise, start walking and resistance training so you keep muscle."

She also suggests attending checkups (including dental).

Related: 5 Money Moves That Will Bump You From Lower Middle Class to Upper Middle Class, According to Finance Experts

What To Do Before Retiring

Plan for it—because it won't plant itself.

"Retirement is a huge change in lifestyle, and if you go into it without a plan, you may feel a little adrift," Ashford says.

She suggests considering whether you want to work part-time , volunteer, pursue a hobby, travel or do many—or all—of the above.

"Planning ahead can help you enjoy a more satisfying and purposeful retirement," she explains.

Kaufman echoed these sentiments, advising everyone who believes they are five years out from retirement to create a detailed retirement income plan.

"This is the point when the 'what ifs' get real," she stresses. "A solid plan turns your savings into a paycheck you can count on—mapping out how your 401(k), IRAs, Social Security and pensions all work together."

She adds that you'll also need to answer tough questions, like:

What's my post-work budget?
When should I claim Social Security?
How do you draw down my money in a tax-smart way?
What safety nets do I have in place for unexpected healthcare expenses?

"By establishing a realistic budget, you can identify any gaps in your financial plan and take steps to address them, ensuring a smoother transition into retirement," Gryne concurs.

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Sources:

Kate Ashford , NerdWallet's investing specialist
Hanna Kaufman, CFP , a certified financial planner at Betterment
Deryck Gryne , a financial advisor at Ally Invest
Pam Krueger , the founder and CEO of Wealthramp

This story was originally reported by Parade on Aug 25, 2025, where it first appeared in the Life section. Add Parade as a Preferred Source by clicking here.