Retiring by the End of 2026? 5 Key Moves to Make Now.

If you plan to retire by the end of 2026, the coming months are crucial. You should absolutely take the opportunity to cherish your final stint in the workforce. But you should also make sure to prepare yourself for that next stage of life. With that in mind, here are five key things to do in the next half-year if you'll be retiring by the time 2026 wraps up.

1. Make sure your budget actually works

One of the biggest mistakes retirees make is underestimating how much they'll spend after leaving their jobs. You may be anticipating a pretty steep drop in spending. But once you crunch the numbers, you may realize that you're looking at higher costs than anticipated.

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List all of your expected expenses and factor in costs you'll incur as a result of not working. You may want to join a gym, sign up for a pickleball league, and plan some trips. And there's no reason you shouldn't, provided you can afford it all. But that's something to check on now.

2. Review your Social Security filing strategy

Your Social Security filing age has an impact on the monthly benefits you receive. If you file before full retirement age, which is 67 if you were born in 1960 or later, your monthly checks will be reduced. The earliest age to claim benefits is 62.

You can also boost your benefits by 8% for each year you delay Social Security past full retirement age, up until you turn 70. If you run your budget numbers and realize you may be looking at higher costs than expected, a delayed Social Security claim could help bridge that gap.

In that case, though, you may need to dip into your savings more in the coming years. So you'll want to make sure your IRA or 401(k) is robust enough to support extra withdrawals.

3. Figure out what you'll do for health coverage

If retiring means losing your employer health insurance, you'll need to make sure you have coverage set up so there isn't a gap. If you'll be 65 by the time you retire, it means you'll generally be eligible to sign up for Medicare. But if you're retiring at a younger age, you'll need a different solution.

If you intend to enroll in Medicare, consider buying supplemental insurance (Medigap) once you sign up. Otherwise, you could be looking at enormous out-of-pocket costs for things like hospital stays and skilled nursing should you need it.

4. Reassess your investment strategy

When you're saving for retirement, it's smart to invest aggressively. But once you're ready to start tapping your savings, it's important to scale back on stocks and shift toward investments that are more stable, like bonds.

Review your asset allocation ahead of retirement and make changes as needed. That could mean not only adding more bonds to your portfolio, but also shifting away from growth stocks to some degree and replacing them with dividend stocks.

5. Have an actual plan for keeping busy

You want retirement to be a fulfilling period of life. And you might think you'll enjoy having your days to yourself with no structure. But that can get boring quickly.

Rather than risk falling into a slump, spend the next few months thinking of ways you can make your newfound free time more meaningful. You may decide to spend a few days a week volunteering. Or, you might take up some hobbies you didn't have time for while you were working. The more concrete a plan you have, the less likely you may be to wind up unhappy.

As you begin your final countdown to retirement, think about the steps you can take to make that transition as smooth as possible. A solid financial review and plan could help you approach your post-working years with a lot more confidence and excitement.

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