If you're five years from retirement, congratulations. That's an awesome place to be. You can see the finish line. The years of saving, working, and planning are starting to feel like they're actually leading somewhere.
It's also the most important window you'll have to get things right.
Five years out is the perfect time — not too early to feel abstract, not so late that your options are limited. It's the fourth quarter, and this is when you execute. The decisions you make in this window will have a bigger impact on your retirement than almost anything you did in the previous twenty years of saving.
The problem is that most people don't know what those decisions should be. And in many cases, nobody's telling them.
The Conversation Nobody's Having
Here's what I see too often: someone walks in five years from retirement and their portfolio hasn't changed since 2015. Same allocation, same funds, same strategy they were using when retirement was fifteen years away. Nobody had the conversation with them about what needs to shift as the finish line gets closer.
I'm not going to bash another advisor when that happens. What I will say is that I think their situation would benefit from some more attention. That's usually all it takes for someone to realize that yes, things should probably look different now than they did a decade ago.
Because this isn't about picking the right fund or chasing the best return anymore. It's about something more fundamental: making sure your strategy is aligned with where you actually are in life.
What Actually Matters in the Five-Year Window
When someone sits down with me and says they're five years out, the first thing I do is not look at their portfolio. I ask questions. I can't draw a retirement plan without knowing what retirement is supposed to look like.
We start with inventory. Where are you at? Pull everything together — retirement accounts, pensions, Social Security estimates, life insurance policies, long-term care, savings, everything. Without a clear snapshot of where you stand, you're planning blind.
Then we go deeper. What else is going on in life? Are you still helping kids with college? Grandkids in the picture? Health concerns? These aren't small details — they shape the entire plan. A client with a pension covering 80% of their income has a completely different conversation than someone relying solely on their 401(k).
From there, we talk about what retirement actually looks like to them. Not a brochure version of retirement — their version. Are they traveling? Downsizing? Do they want security above all else, or is flexibility more important? What does a good Tuesday look like when there's no office to go to?
Then comes income. What are the real numbers? What do you need coming in every month to live the life you just described? And where is it coming from?
And finally, I ask a question most advisors never ask: what does a successful partnership look like to you? If I don't know the yardstick you're using to measure progress, I can't ensure we're hitting the mark.
The Two Fears That Drive Everything
After years of having these conversations, I can tell you that almost every fear about retirement comes down to two things: running out of money and health emergencies. That's it. Strip away all the noise about market performance and interest rates and tax strategy, and those are the two things that keep people up at night.
And quietly behind both of those fears is inflation — the thing that makes your money worth less every year you're retired. A plan that works at 62 needs to still work at 82. If your strategy doesn't account for twenty years of rising costs, it's not really a plan — it's a hope.
But honestly? If you can solve those two core fears, you've eliminated about 90% of the worry. You may not have the luxury trips you dreamed about or a new car every year, but if you know your bills are paid and your health is covered, that's a nice place to be. That's a retirement you can actually enjoy.
The problem is that most planning conversations focus on performance. What did the S&P do this year? Are we beating the benchmark? That stuff matters, but it's not the thing that determines whether you retire on time or have to push it back two years. Strategy and allocation are. Beating the market is not as important as knowing your bills are paid every year no matter what.
The Biggest Mistake I See in the Five-Year Window
This isn't about choosing American Funds Balanced Fund versus American Funds Growth. It's about strategy alignment. Does your portfolio actually match where you are in life?
Markets are more volatile than ever. Large short-term swings happen regularly now — driven by trade volume, algorithmic trading, political events, tariff changes, and the 24-hour news cycle. That's not going away. It's the reality of the market we invest in.
If you're five years out and heavily concentrated in equities, it may be time to start taking some chips off the table and moving a portion into guaranteed investments. Not because equities are bad — they're still the best tool for growth — but because a black swan event, a trade war, or a sharp correction shouldn't be the reason you have to work two more years.
No political event, no tariff change, no market swing should be the thing that pushes your retirement back. That's what proper allocation is designed to prevent.
I wrote in detail about this shift in my piece, Why the 60/40 Portfolio Failed You (And What to Do Instead). The short version: the traditional stock-and-bond split that was supposed to protect investors stopped doing its job. The question isn't just "what should I invest in?" It's "is my current strategy actually designed to get me across the finish line?" If the answer is uncertain, that's worth a conversation.
Three Things You Can Do This Week
You don't need to overhaul everything overnight. But if you're in that five-year window, here are three things you can do right now — sitting at your kitchen table on a Sunday — that will give you a much clearer picture of where you stand.
Get a complete snapshot. Pull every account together in one place. 401(k)s, IRAs, pensions, Social Security estimates, life insurance policies, long-term care, savings — everything. You'd be surprised how many people have never actually seen all of their financial life on one page. Without knowing where you are, you can't make a plan.
Run your retirement income numbers. Start estimating what you'll actually need coming in every month. Then compare that to what your current sources — pension, Social Security, withdrawals — will realistically provide. If there's a gap, this is the fourth quarter to close it. Maybe you increase savings a bit. Maybe you adjust your timeline. But you can't fix what you don't measure.
Do a health and lifestyle audit. This is the one most people skip, and it catches them off guard. Make sure you'll have healthcare in retirement and estimate what it will actually cost. Some clients are so eager to retire that they're blindsided by the price of individual health coverage. And beyond health, think about what you're going to do with forty-plus hours of free time every week. Do a practice run. Try living a week the way you imagine retirement will feel. You might discover things you didn't expect — good and bad — and it's better to find out now than after you've already walked away.
The Bottom Line
Five years from retirement is not the time to coast. It's not the time to assume everything's fine because the market's been good. And it's definitely not the time to keep running the same strategy you've had for the last decade without taking a hard look at whether it still fits.
It's easy to get caught up in performance and the best fund. But the thing that will have the biggest impact on your retirement isn't whether you beat the S&P by half a percent. It's whether your allocation and strategy are built for where you are right now — not where you were ten years ago.
If your situation could use some more attention, that's not a criticism of anyone. It's an opportunity to make sure the next five years set you up for the retirement you actually want.
You've spent a career getting here. The finish line is in sight. Make sure you're running the right play to get across it.