Retiring in 2026-2027: Your Final Countdown Checklist

Tom received the letter from his company’s HR department recently: the voluntary early retirement package he’d been considering was real, and he had 90 days to decide. At age 63, with a retirement date potentially in early 2026, Tom suddenly realized he had more questions than answers. Does he have enough saved? When should he file for Social Security? What about health insurance?

If you’re planning to retire in 2026 or 2027, you’re likely experiencing similar thoughts. The transition from working life to retirement represents one of the most significant financial and lifestyle changes you will ever make. The decisions you make in the next 12-24 months will affect the rest of your life.

The good news? With proper planning and strategic decision-making, you can position yourself for a financially secure and fulfilling retirement. Here’s your comprehensive guide to making the most of your final working years and early retirement months.

Social Security: Timing Is Everything

For those retiring in 2026-2027, Social Security timing decisions are particularly crucial. If you were born in 1960 or later, your full retirement age (FRA) is 67. This means if you’re retiring at 65 or 66, you and your spouse will most likely face permanent benefit reductions that compound over your entire retirement.

The maximum Social Security benefit varies significantly based on when you retire and claim. In 2025, if you retire at full retirement age, the maximum benefit would be $4,018. However, if you retire early at age 62, the maximum benefit drops to $2,831.

If you wait until age 70, the monthly retirement benefit is at the highest thanks to delayed retirement credits, and the maximum benefit jumps to $5,108

For many 2026-2027 retirees, the optimal strategy involves using other retirement savings to bridge the gap until Social Security benefits maximize.

Medicare Enrollment: Don’t Miss Critical Deadlines

Medicare eligibility begins at age 65, regardless of your retirement timing. Missing enrollment deadlines can result in permanent penalties that increase your premiums for life. Your Initial Enrollment Period (IEP) spans 7 months: 3 months before your 65th birthday month, your birthday month, and 3 months after.

Don’t forget Medicare doesn’t cover everything. Long-term care, dental, vision, and hearing aids typically require separate coverage. Many retirees find Medicare Supplement (Medigap) policies helpful, possibly even essential, for comprehensive coverage.

Portfolio Positioning: Transitioning from Growth to Income

As you approach retirement, your investment strategy should gradually shift from wealth accumulation to wealth preservation and income generation. This doesn’t mean eliminating growth investments entirely but rather creating a more balanced approach that can weather market volatility while providing steady income.

Tax Planning: Your Last Best Opportunities

If you’re still working, you’re likely in your highest tax bracket. For 2026-2027 retirees, the next few years represent final opportunities to maximize tax-advantaged contributions. The 2025 401(k) contribution limit is $23,500, with an additional $7,500 catch-up contribution for those 50 and older. If you’re between the ages of 60 and 63, you can contribute an even higher catch-up amount of $11,250.

Don’t overlook state tax considerations. Some states do not tax retirement income, while others offer significant exemptions. If you’re flexible about where to live, state tax differences could significantly impact your retirement budget.

Healthcare Costs: Planning for the Unexpected

Healthcare represents one of the largest and most unpredictable retirement expenses. According to the 2025 Fidelity Retiree Health Care Cost Estimate, a 65-year-old individual may need $172,500 in after-tax savings to cover health care expenses in retirement.

Long-term care insurance deserves serious consideration. Long-term care expenses can quickly deplete retirement savings. Insurance premiums increase with age and health issues, making pre-retirement purchase often optimal.

Creating Your Retirement Budget

Developing a realistic retirement budget requires careful analysis of both essential and discretionary expenses. Start by calculating your fixed costs: housing, utilities, insurance, taxes, and debt payments. Then estimate variable expenses like food, transportation, healthcare, and entertainment.

Consider creating multiple budget scenarios: a basic needs budget covering essential expenses and a comfortable lifestyle budget including travel and discretionary spending. This approach helps you understand your minimum income requirements versus your preferred lifestyle funding needs.

Ready to start crunching the numbers? Try our retirement calculator

Your Action Plan for the Next 24 Months

Here’s a recap of the next steps to take when getting ready to retire:

1. Create a month-by-month checklist for your retirement preparation.
2. Review all benefits and retirement accounts.
3. Model different retirement scenarios.
4. Start with the most time-sensitive items:
   1. Medicare enrollment deadlines
   2. Social Security strategy modeling
   3. Maximizing final years of tax-advantaged contributions
5. Work on longer-term positioning:
   1. Portfolio allocation adjustments
   2. Retirement lifestyle planning
   3. Healthcare costs

“The final years before retirement are when strategic planning often pays the biggest dividends,” says Scott Ente, Senior Vice President, Investments at David Lerner Associates.

“Social Security timing, tax-efficient withdrawal strategies, and proper portfolio positioning can add hundreds of thousands of dollars to your retirement security. These decisions are too important to make without considering professional guidance —the stakes are simply too high to guess.”

Your retirement can be everything you’ve worked toward, but only with proper preparation. The next 24 months are your opportunity to ensure you’re ready for this exciting next chapter.

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Material contained in this article is provided for information purposes only. It is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. These materials are provided for general information and educational purposes, based on publicly available information from sources believed to be reliable. We cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual’s circumstances. Each taxpayer should seek independent advice from a tax professional based on his or her circumstances. The subject of this article is fictitious and created for illustrative purposes only. It is based on events of a similar nature and should not be interpreted as a direct depiction of any specific individual, organization, or incident. Any resemblance to actual persons, living or deceased, or actual events is purely coincidental.