Your 5-Year Retirement Countdown: The Action Plan That Actually Works

You know retirement is coming, but you're not ready.

You're staring at your calendar and it hits you: retirement isn't some distant dream anymore. It's five years away, maybe less. And suddenly, all those retirement conversations you've been putting off feel urgent.

You know you should be doing something to prepare, but what exactly? Check your 401(k) balance and hope for the best? Cut expenses and live like a monk for the next five years? Wing it and see what happens?

The truth is, most lawyers approaching retirement feel completely unprepared—not because they haven't saved enough, but because they haven't taken the right steps at the right time.

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Poor Planning in These Final Years is Expensive

I'm going to be brutally honest with you. The mistakes you make in the five years before retirement are the most expensive ones you'll ever make.

Discover you need an extra $500,000 saved when you're one year out? That's nearly impossible to fix. Realize your partnership buyout will create a massive tax bill in your first year of retirement? Too late to plan around it.

But discover these issues five years out? You have time to make changes, implement strategies, and course-correct. The difference between planning and hoping isn't just stress—it's potentially hundreds of thousands of dollars and years of your life.

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When Five Years Makes All the Difference

Let's walk through what this looks like in practice. Picture a corporate attorney who comes to me exactly five years before her planned retirement. "I think I'm in good shape," she says, "but I honestly don't know for sure."

Here's how a strategic five-year plan might unfold:

Year 5: We discover $200,000 in retirement assets she'd left “hanging out” in an old, inactive retirement plan. It also made sense to implement a cash balance plan that lets her save an extra $180,000 annually (A final push).

Year 4: We get super clear on her expenses and realize she could maintain her lifestyle on $40,000 more than she thought—But that’s okay, because there’s time to plan.

Year 3: We review her partnership agreement and discover her buyout would be paid over seven years, providing steady income in early retirement. This income stream also affected her Social Security and withdrawal strategy allowing to optimize for income and tax purposes.

Year 2: We build her retirement income plan and secure long-term care insurance while she's still healthy.

Year 1: We help her transition from "Attorney" to "Grandmother and World Traveler."

She retires right on schedule—confident, prepared, and excited about her future.

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The Transformation: Your Year-by-Year Action Plan

Let’s break this down into a general timeline that most everyone can relate to and take action on:

5 Years Out: Take Inventory of Everything

This isn't just about your 401(k) balance. I mean everything: IRAs, brokerage accounts, that old pension from your government job, real estate, business interests, life insurance cash value—even assets you might have forgotten about.

This gives you time to make changes. Maybe you discover you can implement a profit-sharing plan or cash balance pension plan for one final push towards retirement. These strategies can let you save $100,000+ annually in tax-deferred accounts, but they take time to set up and implement.

4 Years Out: Dial in on Your Expenses

Your expenses are your biggest lever in retirement and drive every other number—including the rate of return needed on your investment portfolio and your overall retirement target.

Small changes in expenses can add years to how long your money lasts. But you need time to get super clear on what you're actually spending and what that will look like in retirement.

Use the top-down approach: grab your tax return, subtract taxes and savings, and see what's left. That's your real lifestyle spending.

3 Years Out: Review Partnership Agreements and Exit Strategies

If you own your practice or are a partner, this is critical. Understand any buy-out terms or payments made to you after you retire. Will you receive a lump sum or payments over time? How will this affect your taxes in retirement?

This presents a huge planning opportunity for how you'll be withdrawing from your other investments. Maybe you don't need to touch your retirement accounts for the first few years if you're receiving partnership payments.

Consider seeking professional help if you're thinking about selling your practice. The timing and structure of a sale can make a massive difference in your overall retirement picture.

2 Years Out: Build Your Retirement Income Plan

Now it's time to get tactical. How will you actually generate income in retirement? Which accounts will you tap first? How will you manage taxes?

Be careful to consider not just your expenses today but healthcare expenses in retirement. Here's a sobering statistic: 70% of individuals turning age 65 this year will need some sort of long-term care in retirement, and it's not cheap.

Long-term care insurance becomes much more expensive (or impossible to get) as you age, so this is the time to explore your options.

1 Year Out: Envision Life and Purpose Beyond the Law

With the numbers out of the way, it's time to think about the bigger picture. What will give your life meaning when you're not practicing law?

Is it spending more time traveling with your spouse? Being more present with your grandchildren? Maybe you'll still be a lawyer, but can finally participate in causes you're most passionate about, using your knowledge for a charitable organization or serving on boards of foundations you care about.

Many lawyers struggle with the loss of identity in retirement. You've been "Attorney Smith" for 30+ years. Who are you when you're not practicing law?

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You Don't Have to Figure This Out Alone

The five years before retirement are the most important years for your financial future. But they're also the most overwhelming if you try to tackle everything yourself.

Start by asking trusted colleagues who've recently retired about their experience. What do they wish they'd done differently? What surprised them most about the transition?

Consider engaging with a financial planner who specifically serves your profession—someone who understands partnership agreements, practice sales, and the unique challenges lawyers face in retirement. The right advisor can help you create and implement a systematic five-year countdown plan, so you can retire with confidence instead of anxiety.

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The Response: Start Your Countdown Today

Don't wait until retirement is next year to start preparing. The earlier you start this process, the more options you'll have and the more confident you'll feel.