Your Year Before Retirement Checklist: The Four Moves That Matter Most.

A year before retirement checklist really comes down to four moves. Stress-test your budget against inflation and health care costs. Settle your Social Security claiming strategy, including survivor benefits. Build a plan for Medicare and long-term care. And design a way to turn your savings into a steady paycheck. Do those four things in your final working year and you walk into retirement with a plan, not a hope.

These aren't the tips you'll find on any generic list. They're the areas where small mistakes in the last year get expensive fast, because you no longer have a paycheck to paper over them. The video below runs through all four, and the walkthrough underneath updates every figure for 2026 and adds the pieces the video only touched on.

Watch: Patrick Shope on the four steps to take in your final year before retirement.

Step 1: Stress-test your retirement budget

Most people build a retirement budget. Very few test it against the two things that break budgets: inflation and health care. A regular budget says, "I'll need $8,000 a month." A stress-tested budget asks, "What happens if that number keeps climbing?"

Let me show you the math the video uses. Take that $8,000 a month and run 5% inflation against it for five years straight. The $8,000 need becomes about $10,210. Same lifestyle, bigger bill, just from prices rising. If your income plan can't stretch to cover that, you want to know now, not in year five.

The move I like here is sorting every expense into three groups: needs, wants, and wishes. Needs are the non-negotiables, housing, utilities, food, insurance. Wants are dining out, travel, hobbies. Wishes are the extras, the luxury trip or the big gifts for the grandkids. When a bad market or a bad inflation year hits, you want to already know which line you'd trim first without touching your core life.

One piece people skip entirely: health care tends to inflate faster than everything else. The video's example makes the point. Budget $1,500 a month for care today, ignore health care inflation, and ten years in you could be looking at $2,200, a $700-a-month gap. That's a hole in an otherwise solid plan.

When this step is done, you have a budget you've already run through a couple of rough years on paper, and you know exactly which expenses are needs and which are the first to go. If the stress test looks shaky, that's worth pausing on, and it's one of the signs you might not be ready to retire yet.

Step 2: Settle your Social Security claiming strategy

This isn't just picking a date. It's a strategy that accounts for both spouses and, just as important, the survivor.

Think of it like choosing between pension options. Claim early at 62 and you take a permanently smaller check, roughly 30% less than your full retirement age amount. Wait until your full retirement age of 67 and you get the full benefit, up to about $4,152 a month in 2026 at the top end. Delay past 67 and you earn 8% more per year, simple, up to age 70. Same worker, very different checks.

Here's the part most couples miss. When one spouse passes, the survivor keeps the larger of the two benefits, not both. So the higher earner's check often becomes the survivor benefit. That's why it can make sense for the higher earner to delay, locking in a bigger check that protects whoever lives longer, while the lower earner claims earlier. The first practical step is simple: create your my Social Security account at ssa.gov and pull your real estimates instead of guessing.

There's more nuance to the timing than I can fit here, and I've laid it out separately in how to decide when to claim Social Security. For this checklist, the point is to make the decision on purpose, coordinated between the two of you, before you file.

When this step is done, you have a claiming plan on paper for both spouses, with a clear reason behind each date and the survivor benefit accounted for.

Step 3: Build your Medicare and long-term care plan

Health care is the wild card, and it has two layers people confuse. First, Medicare. You generally enroll at 65 during your initial enrollment period, unless you have credible coverage from active employment. Miss that window without it and you can face late-enrollment penalties that follow you.

But Medicare is the floor, not the whole house. Original Medicare covers about 80% of approved Part B services after the deductible, and it leaves out most dental, vision, hearing aids, and long-term care. In 2026 the standard Part B premium is $202.90 a month per person, and if your income is high enough you pay an IRMAA surcharge on top. Medicare looks back two years, so the income you report in 2026 sets the premium you pay in 2028. Something to keep in mind if you're doing anything that spikes your income in your final working year.

The second layer is long-term care, which Medicare barely touches. Care runs roughly $5,000 a month for a home health aide and north of $9,000 a month for a nursing home, depending on where you live. You have three broad ways to handle it:

• Self-insure. Set aside a large pool of assets, often several hundred thousand dollars, earmarked just for care.
• Traditional long-term care insurance. You get leverage on your dollars, but premiums can rise over time.
• Hybrid life-and-long-term-care policies. More certainty about what you'll pay, though often with lower coverage ratios.

None of these is the right answer for everyone. The right one depends on your assets, your family history, and how you feel about paying premiums for something you may never use. In our office, this is the step people most want to skip, and it's the one that wrecks the most otherwise-solid plans.

When this step is done, you know your Medicare enrollment date, you've priced your supplemental coverage, and you've picked a lane for long-term care instead of leaving it to chance.

Step 4: Turn your savings into a paycheck

This is the hardest step, and it's got nothing to do with math. For thirty or forty years you saved. Every two weeks a paycheck landed, and you watched your balances grow. Now you flip it. No more paycheck, and instead of adding to your accounts, you're pulling from them and sometimes watching them shrink. That's a real emotional adjustment, and the market's ups and downs make it louder.

The biggest danger in that first stretch isn't a down market by itself. It's being forced to sell investments while they're down to pay your bills. That's sequence-of-returns risk, and a rough market in your first few years of retirement can do lasting damage because you never give those assets a chance to recover.

One way to blunt it is the bucket approach: keep near-term spending in stable money so you're never selling growth investments at the wrong time.

You live off the first two buckets, which gives the growth bucket years to ride out a downturn. I've gone deeper on the mechanics in how the bucket strategy handles sequence-of-returns risk. The key idea is that retirement investing isn't only about returns anymore. It's about the order those returns show up in and where your next few years of spending is sitting.

When this step is done, you know which accounts your first couple of years of income comes from, and you have a plan that doesn't force you to sell at the worst possible moment.

Your last twelve months, on one page

Run these in order and each one hands you something concrete: a tested budget, a claiming plan, a health care plan, and an income plan. The reason the final year matters so much is that it's your last chance to fix any of them before your plan has to stand on its own. Miss one and you're not just leaving a little money on the table. You can end up stressed during the years that were supposed to feel free.

If pulling all four together feels like a lot, that's normal, because they interact. Your claiming date affects your income taxes, which affects your Medicare premium, which affects your budget. When you're ready to work through your own numbers, start a conversation with our office and we'll walk your four steps together.

The goal of this last year isn't to get everything perfect. It's to make each decision on purpose, so that when the paycheck stops, nothing about your plan takes you by surprise.

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