Retirement Planning
One Year Before Retirement: A 12-Month Planning Checklist
One year before retirement, the goal is to turn a target date into a coordinated transition plan. Confirm the income that will begin, the benefits that will end, the healthcare coverage that must replace them, and the cash needed while every change takes effect.
12 to 9 months before retirement: test the date against the numbers
Start with the intended last day of work and build a first-year retirement budget around it. Separate essential monthly expenses from flexible spending, add irregular costs such as property taxes and insurance premiums, and include a realistic allowance for healthcare, travel, home repairs, and family support.
Next, list every expected income source with its start date, payment frequency, tax treatment, and survivor provisions. Include Social Security, pensions, annuity income, cash reserves, part-time earnings, and planned portfolio withdrawals. The purpose is to find timing gaps before a paycheck ends—not after.
9 to 6 months before retirement: confirm Social Security and pension choices
Review the earnings record and benefit estimates in your official Social Security account, then compare claiming dates in the context of the complete household plan. A larger monthly benefit, earlier access to income, spouse and survivor needs, employment, taxes, and expected longevity can all affect the decision.
Ask each pension administrator for a current estimate and the written rules for the available payment options. A single-life amount may be higher while the participant is alive, but a joint-and-survivor election may continue income to a spouse. Confirm the election deadline, whether it can be changed, and how the start date coordinates with the final paycheck.
6 to 3 months before retirement: prevent a healthcare coverage gap
If retirement is near age 65, map the employer coverage end date against the Medicare enrollment rules that apply to you. Medicare's Initial Enrollment Period generally lasts seven months around the month a person turns 65. Someone covered by an eligible current-employment group plan may qualify for an eight-month Special Enrollment Period for Part B after the work or coverage ends, whichever happens first.
Do not assume COBRA extends the Part B enrollment window. Medicare says the Special Enrollment Period begins when current employment or job-based coverage ends even if COBRA is elected. When employer coverage is ending, Medicare recommends checking the end date and applying about a month earlier to help avoid a gap. Also coordinate HSA contributions with the effective date of any Medicare coverage.
The final 90 days: decide what happens to workplace accounts
Leaving a job does not create one automatic answer for a 401(k) or similar account. Depending on the plan, a participant may be able to leave money in the existing plan, roll eligible assets to a new employer plan or IRA, or take a distribution. Compare fees, investment choices, creditor protections, access rules, services, required distributions, and tax consequences before moving funds.
If a rollover is appropriate, ask about a direct rollover rather than having the payment made personally. The IRS notes that an eligible workplace-plan distribution paid to the participant is generally subject to 20% federal withholding, even when the person intends to complete a rollover later. Review company stock, after-tax contributions, Roth money, plan loans, and pension choices separately because special rules may apply.
The final 30 days: verify the handoff, not just the plan
Create a one-page retirement calendar showing the final paycheck, unused leave payment, benefit end dates, Social Security or pension start dates, Medicare effective date, first planned withdrawal, and the bills that will be paid from each account. Keep enough accessible cash for timing delays and expenses that do not arrive monthly.
Before the last day, update contact information with former-employer plans, confirm beneficiaries, save benefit documents, review tax withholding and estimated-payment needs, and make sure powers of attorney and estate documents match current intent. A clean handoff reduces the chance that an administrative detail becomes an expensive retirement decision.
Planning perspective
Key planning takeaways
- Test the retirement date against first-year spending, income start dates, taxes, and an accessible cash reserve.
- Coordinate Social Security, pension elections, Medicare, employer coverage, and HSA timing before submitting applications.
- Compare workplace-account options and complete benefit, beneficiary, and withholding updates before the final paycheck.
Direct answers
Questions families ask
What should I do one year before retirement?
Build a first-year spending plan, inventory every income source and start date, review Social Security and pension choices, map healthcare coverage, compare workplace-account options, and create a written transition calendar for the final year.
How early can I apply for Social Security retirement benefits?
The Social Security Administration says you can apply up to four months before the month you want retirement benefits to begin. Review your official earnings record and coordinate the claiming date with spouse, survivor, tax, and cash-flow needs before applying.
When should I apply for Medicare if I am retiring after 65?
The timing depends on your current coverage and eligibility. Medicare says people losing eligible current-employment group coverage generally have an eight-month Special Enrollment Period for Part B, but the period begins when work or coverage ends even if COBRA is chosen. Check your dates with Medicare and the employer benefits administrator before retiring.
Should I roll over my 401(k) as soon as I retire?
Not automatically. Leaving the assets in the plan, completing a direct rollover, moving to another eligible plan, or taking a distribution can have different fees, services, protections, access rules, and tax effects. Review the plan documents and your circumstances before choosing.
Authoritative resources
Verify the rules that shape the decision.
This educational overview is not individualized financial, tax, or legal advice. Decisions should be evaluated using your complete circumstances and appropriate licensed professionals.
Bring the pieces together
Review this with Mark.
Use this insight as a starting point, then build a retirement strategy around your own assets, taxes, and family goals.