
Ready to retire in 5 years? Here's your checklist
Other investing decisions, like a transition into retirement, require a more hands-on approach.
Christine Benz, Morningstar's director of personal finance and retirement planning, recommends taking a preemptive approach as you get closer to retirement. The key is to visualize what you want your retirement to look like while you have enough time to make any adjustments you might need to get you there.
Here are five steps to take now if you plan to retire in the next five years:
1. Consider the role of work in retirement
Decide whether some kind of work is realistically part of your retirement plan. That income stream can make your retirement spending simpler, but it shouldn't be the linchpin of your whole plan. That's because you may not be able to work even if you want to.
2. Track your expenses
Understand what you're actually spending today and see whether your spending will change over the next few years and into retirement. Getting a grasp of your future spending needs will help you determine whether your plan is on track.
3. Check up on Social Security
For most people, Social Security is a key source of income in retirement. Create an account on the Social Security website and make sure they have your correct information. This will let you model out different Social Security claiming dates using your own information.
4. Assess your current retirement savings
Look at your spending and subtract Social Security to get a sense of what you'll need from your portfolio. If your spending doesn't align with roughly 4% or less of your portfolio, you may need to make some changes. Consider saving more, investing differently, putting off your planned retirement date, or adjusting how much you plan to spend in retirement.
5. Derisk your portfolio
As you get within 10 years of retirement, you'll want to make sure that your asset allocation can help protect your retirement plan from getting derailed by market volatility. If equity losses happen early on in your retirement, you can spend from your safer assets and wait until the market recovers to pull from your stock portfolio.
By thinking about retirement preemptively, you'll have a better sense of when you want to retire and what you want it to be like. Plus, you can make any course corrections needed to make it happen.
___
This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


BBC News
14 minutes ago
- BBC News
Trump says US may not reach trade deal with Canada
US President Donald Trump has said he does not expect to reach a trade deal with Canada, after he gave the country a deadline of 1 August to carve out an agreement."We haven't really had a lot of luck with Canada," Trump told reporters ahead of his trip to Scotland on Friday. "I think Canada could be one where there's just a tariff, not really a negotiation."His remarks come after Canadian Prime Minister Mark Carney signalled earlier this week that Canada "will not accept a bad deal" and rush into an is among several countries given an August deadline by Trump as part of his global tariff strategy and push to renegotiate deals with US trade partners. Trump has said that US importers buying in goods from Canada will face a 35% tax if no deal is reached before the 1 August deadline. But that levy will not apply to goods compliant under an existing North American free trade agreement between Canada, the US and Mexico. Trump has already imposed a blanket 25% tariff on imports of certain Canadian goods, as well as a 50% tariff on aluminium and steel imports and a 25% tariff on all cars and trucks not built in the US president has argued that these will boost American manufacturing and protect jobs. The move has disrupted the global economy, and prompted warnings from critics that products could become more expensive for US sells three-quarters of its products to the US and its auto industry is deeply intertwined with its southern neighbour - making the impact of tariffs even more two countries have been engaged in intense trade and security negotiations since Prime Minister Carney took office in May. But Canadian officials have recently downplayed the possibility of reaching a deal a two-day visit to Washington, intergovernmental affairs minister Dominic LeBlanc told reporters on Thursday that negotiators "have a lot of work" in front of them. He described the ongoing talks as "productive" and "cordial", but reiterated that Canada will take "the time necessary to get the best deal".Trump has announced trade agreements with other countries in recent days, including Japan, which he said will face a lower tariff rate of 15% in exchange for a $550bn (£409bn) investment in the US.


Reuters
14 minutes ago
- Reuters
HCA lifts 2025 profit forecast, flags insurance policy uncertainty
July 25 (Reuters) - HCA Healthcare (HCA.N), opens new tab lifted its 2025 profit forecast but said it cannot determine how looming changes to insurance plans under Medicaid and Obamacare will impact 2026 earnings, sending the hospital operator's shares down 2% on Friday. Some COVID-era subsidies under Obamacare are set to lapse in 2026. That would impact patient coverage, lead to a spike in insurance premiums and cause a drop in enrollment numbers, leaving hospital operators such as HCA to foot a heftier bill for compensated care. "We continue to advocate strongly for their extension, but at this point we do not know what the outcome will be," CEO Samuel Hazen said during a call with analysts. Hazen said the company is working on a cost efficiency initiative to offset any impact from the subsidy expiry and other government actions such as Medicaid policy changes and tariffs. Still, the hospital chain operator raised its 2025 profit forecast to between $25.50 and $27 per share, from a range of $24.05 to $25.85 earlier. The latest forecast includes the expected impact from the Trump administration's current and future policies, including potential tariffs on imports. It also posted upbeat second-quarter results. Quarterly revenue rose 6.4% to $18.61 billion, compared with analysts' estimates of $18.50 billion, according to data compiled by LSEG. Adjusted profit came in at $6.84 per share, beating estimates of $6.25. However, HCA's same-facility inpatient and outpatient surgeries decreased by 0.3% and 0.6%, respectively, in the quarter ended June 30. Investors appeared concerned about upcoming regulatory changes that could lead to lower medical membership on the Obamacare and Medicaid plans, said Morningstar analyst Julie Utterback. "Share reaction may reflect that profit growth could slow materially for caregivers like HCA in the next couple of years." Utterback said.


Reuters
30 minutes ago
- Reuters
Law firm Milbank cuts Katyal's $3,250 rate in defending NJ cities against Trump
July 25 (Reuters) - Prominent lawyer Neal Katyal of law firm Milbank will charge a sharply reduced hourly rate and not his standard $3,250 as he helps to defend two New Jersey cities sued by President Donald Trump's administration over their immigration policies, according to a contract obtained by Reuters. Milbank's lawyers, including Katyal, will each charge $300 an hour — a fee that will be split evenly by the cities of Newark and Hoboken for the litigation in federal court in New Jersey, the contract showed. The Trump administration in May sued Newark, Hoboken and two other New Jersey cities, accusing them of being so-called sanctuary jurisdictions and obstructing federal immigration agents. Katyal in the July 11 contract said he normally charges $3,250 an hour, and that some other partners at his 1,000-lawyer firm bill hourly between $1,865 and $2,475. New York-headquartered Milbank is one of nine firms that reached deals with Trump in March and April, after he began issuing executive orders against law firms that restricted their access to government officials and federal contracting work. Milbank, which had not been hit with an order, in its deal said it earmarked $100 million in free legal services for mutually agreed-upon initiatives with the White House. Four other law firms successfully sued to block Trump's orders against them. Here, Milbank in defending the two cities said it agreed to reduce its standard rates because a third-party — the nonprofit Goodnation Foundation — is picking up part of the legal tab. Hoboken said it will not pay more than $53,000 in any calendar year to Milbank. The document did not show how much Goodnation Foundation is expected to pay, and the organization, Milbank and Katyal did not immediately respond to requests for comment. A Newark official had no immediate comment, and Hoboken did not immediately respond to a request for one. Large law firms commonly reduce their hourly rates, or sometimes bill at no cost, for legal work for state and local government clients. As hourly rates have steadily increased across the profession, at least two other law firms, Quinn Emanuel Urquhart & Sullivan and Susman Godfrey, also have hit the $3,000 an hour milestone. A January report by the Thomson Reuters Institute and the Georgetown Law Center on Ethics and the Legal Profession said clients have been willing to accept 'dramatic increases' in rates. The institute and Reuters share the same parent company. Katyal, a former acting U.S. solicitor general during President Barack Obama's administration, in 2022 was billing at $2,465 an hour when he was at law firm Hogan Lovells. He joined Milbank in February, and now leads the firm's appellate team. He has argued more than 50 cases before the U.S. Supreme Court. Milbank's team defending Newark and Hoboken also includes Gurbir Grewal, who is a former New Jersey attorney general and enforcement head at the U.S. Securities and Exchange Commission, and appellate specialist Colleen Roh Sinzdak. Read more: US judge slashes fees for IBM lawyers in billion-dollar software contract fight Lawyers in banking cases take a loss despite $35 million fee award US judge rejects lawyers' $94 million fee bid in auto parts pricing case Lawyers defend $205 million legal fee in US auto class action settlement More lawyers join the $3,000-an-hour club, as other firms close in