When is the Best Time to Get Ready for Retirement?
Jeremy Keil breaks down the common timing mistake people make in retirement planning and explains how to create a more secure and accurate plan.
Most people start adjusting their retirement plan too late. Here’s the real timeline that helps you retire confidently — without last-minute stress or costly mistakes.
Most people assume they’ll retire at a certain age: 65, 67, maybe even 70. They imagine a clean timeline where they work until they’re ready, shift their money around a year or two beforehand, and ease into retirement with everything lined up perfectly.
But reality rarely follows that script.
On average, people retire three years earlier than they expect. Sometimes it’s because of health. Sometimes it’s burnout. Sometimes it’s a job change. And sometimes it’s simply because they hit a moment where work no longer feels necessary.
Whatever the reason, the end result is the same: your retirement timeline will likely come faster than you planned for.
And that has major implications for your investments.
The Planning Mistake Almost Everyone Makes
From years of conversations with pre-retirees, I’ve noticed something consistent. People usually think the right time to start preparing their portfolio for retirement is two years before they stop working.
And I understand the logic. Two years sounds like enough time to adjust. But in practice? It’s often too late.
If the average person retires three years ahead of schedule, and they don’t start preparing until two years before their expected date, that means they’re making big decisions one year after they’ve already left the workforce — or during a stressful period of transition.
That’s a recipe for rushed decisions, emotional choices, and avoidable mistakes.
The Five-Year Rule: Start Sooner, Retire Smarter
Instead of cramming your retirement plan into a shorter timeframe, start repositioning your portfolio and preparing your finances five years before your anticipated retirement date.
Five years gives you the breathing room to make smart, gradual changes instead of last-minute, rushed ones. Here’s why that matters:
1. You Can Reduce Risk Slowly Instead of Abruptly
Shifting from a growth-focused portfolio to a retirement-income portfolio doesn’t need to happen overnight. With five years, you can make incremental adjustments that feel intentional—not reactive.
2. You Can Prepare Emotionally for Market Volatility
I had a couple come into my office in early 2020 who planned to leave work within a couple of years. Because they were trying to get as much growth as they could right up until that retirement deadline at the end of the year, they were heavily invested in the growth. COVID hit and they got caught in a sudden 30% market drop. Feeling pressure, they sold—locking in the loss—then missed the rapid 20% rebound that followed.
If planning begins five years out, you’re not scrambling. You’re better positioned to avoid fear-driven decisions.
3. You Can Practice Living on Retirement Income
Most people don’t actually know what retirement feels like until they test it. Five years gives you time to rehearse: shift your savings pattern, adjust spending, and understand how your money will flow once paychecks stop.
Retirement Comes Faster Than You Expect
One of the patterns I’ve seen again and again is that people wait too long to do the important planning. They wait to review their investments. They wait to adjust their risk. They wait to build their withdrawal strategy. They wait to think about taxes.
But the people who retire most confidently are the ones who start early — not because they’re nervous, but because they want options.
Beginning five years out gives you flexibility. Flexibility leads to confidence. And confidence leads to a retirement that feels less like a step off a cliff… and more like a natural next chapter.
About the Author:
Jeremy Keil, CFP®, CFA® is a financial advisor in Milwaukee, WI, author of the bestseller Retire Today: Create Your Retirement Master Plan in 5 Simple Steps and host of both the Retire Today Podcast and Mr. Retirement YouTube channel
Links:
- Buy Jeremy’s book – Retire Today: Create Your Retirement Master Plan in 5 Simple Steps
- Learn how to build your retirement masterplan plan at FiveStepRetirementPlan.com
- Work with my team to get more income, pay less in taxes, and avoid big retirement mistakes: KeilFP.com
Disclosures
This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.
The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past performance is no guarantee of future results.
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