Retiring in 5 years? Here are 5 things that can make the difference between comfort and running out cash

Perfect Angle Images/ Shutterstock

Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.

The final five years before you retire are when your financial journey transforms from a marathon into a sprint.

According to a survey by MassMutual, Americans retire at age 62 on average — so if you’re in your late-50s or early-60s, your top priority is probably boosting your nest egg as much as possible (1).

Top Picks

Fortunately, for many Americans, earnings tend to reach their peak near the end of their careers. Plus, children may be flying the coop, and mortgages are (hopefully) paid off — or at least close to it.

Unfortunately, even with those forces in their favor, many Americans aren’t prepared for retirement. One in five American adults over the age of 50 have no retirement savings at all, according to AARP (2). That means they’re a far cry away from the $1.49 million Americans believe that they’ll need in order to retire, based on a survey from investment management company Natixis (3). Another report from Northwestern Mutual places the “magic number” for retirement only slightly lower at $1.46 million (4).

So if you’re one of the many who want to widen their safety net over the next five years, here are five steps to take now in order to get ahead.

1. Max out your tax-advantaged accounts

In 2022, the Joe Biden administration implemented the SECURE Act 2.0 — enabling older workers to super-charge their 401(k) contributions (5).

As of 2025, those over the age of 50 can make “catch-up” contributions of $7,500 per year, and those between the ages of 60 and 63 can make “super catch-up” contributions of $11,250. For someone in their early 60s, when combining that with the standard elective employee contribution (6), their total contribution could be $35,750 this year. And if they benefit from an employer 401(k) match, they could catch up to their retirement goals even faster.

Most older workers are not taking advantage of these generous catch-up features. Only 16% of eligible employees made catch-up contributions in 2024, according to Vanguard research cited by Morningstar (7).

If you can, it’s important to leverage these special provisions in your 50s and 60s to make your retirement as comfortable as possible. Consider investing in an IRA once you max out your 401(k) contributions, too — as many Americans contribute to both accounts to maximize their savings and investment alternatives.

However, there are other options for both building out your nest egg and building in some resiliency against market downturns.

Open a gold IRA

A gold IRA is an alternative way to build up your retirement fund by investing in an inflation-hedging asset. This combines the wealth preservation power of gold with the tax benefits of an IRA.

The theory goes that, since gold can’t be printed like fiat currency, it tends to hold its value better during a crash. If you’re worried about the performance of American stocks and bonds, gold could help provide a bit of a buffer and can act as a strategic withdrawl tool for years when the market is down.

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. If gold goes on another bull run, like it did during 2025, you can also see real gains, not just wealth preservation.

But gold, like other alternative assets, carries risk. To learn more, you can get a free information guide from Priority Gold. That way you can make sure it’s right for you before committing. And if you do decide to go in, you can get up to $10,000 in free silver on qualifying purchases. Just remember: gold is typically used as just one part of a well-diversified portfolio.

2. Create a robust retirement income plan

It’s easy to get so caught up thinking about the size of your nest egg that you forget to plan for withdrawals. Most people rely on a simple rule of thumb, such as the standard 4% rule, to plan their retirement.

But as you approach this new phase of life where you don’t have steady employment income, you have to plan for how and when you withdraw money. For instance, delaying Social Security benefits could increase the monthly amount you receive.

This could give you enough time to sell some assets from your taxable brokerage accounts for tax gain harvesting, or to convert 401(k) funds into a Roth IRA for tax-free growth.

If you have other sources of retirement income, perhaps from a rental property or traditional defined benefit pensions, you will also need to figure out these additional tax consequences.

This is where is might be worth meeting with an expert to make sure you’ve ironed out the right withdrawal strategy for your target quality of life in retirement.

Work with a financial advisor

Research from Vanguard shows that working with a financial advisor can add about 3% to net returns over time (8). That difference can become substantial. For example, if you started with a $50,000 portfolio, professional guidance could mean more than $1.3 million in additional growth over 30 years, depending on market conditions and your investment strategy.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

Simply answer a few questions about your savings, retirement timeline and overall investment portfolio.

From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.

You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.

3. Stress-test for market volatility

It’s likely that your retirement plan is based on simple assumptions about market returns and withdrawal rates. For instance, maybe your plan assumes the stock market will deliver a 7% annual return, and your annual withdrawals will be 4%.

However, it’s important to note that these are long-term averages and you need to stress-test your portfolio for prolonged market downturns. If, for example, the stock market drops 10% in your first year of retirement and you withdraw 4%, then you would be left with a portfolio that is at least 14% smaller.

That can have a long-term impact on how much money you can withdraw during the rest of your retirement.

Stress testing your portfolio and creating a backup budget or emergency fund can help you prepare for such market downturns and unexpected volatility. As mentioned above, alternative assets like gold can mitigate a down year. However, another option is to hold enough cash on hand to avoid tapping your retirement during a market meltdown instead.

Beat inflation with an emergency fund

Regardless of whether you’re planning to hold cash, alternative assets or both, an emergency fund is part and parcel of good financial planning. Many advisors recommends having three to six months’ worth of living expenses stashed away to manage a sudden medical emergency, or even unexpected job loss right before retirement. If you’re looking to weather a market dip, financial experts like Suze Orman recommend a more aggressive eight months to one year of funds (9).

Not matter what you choose, a core consideration is making sure your money keeps its value while remaining accessible. That means finding an interest rate that meets, or beats, inflation, which came in at 3.4% over the past year without seasonal adjustments, according to the Bureau of Labor Statistics (10).

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base rate APY of 3.55% through program banks. With a new client boost and direct deposit incentive, referred clients can earn up to a 4.55% APY.

That’s 10 times the national deposit savings rate, according to the FDIC’s August report.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.

4. Spread your assets in a tax-optimized way

Five years from retirement could be the ideal time to balance out your nest egg and spread it across multiple investment accounts.

If you have too much accumulated in taxable brokerage accounts, it could be time to consider contributing and maxing out your tax-deferred accounts for the next few years. For those with a robust 401(k) plan, this might be the ideal time to consider Roth conversions.

It can also be worth looking at other, more unique tax-advantageous strategies. For instance, real estate offers key tax advantages that can prepare you for your gold years, while potentially giving you an income boost.

Pull passive income from real estate

Arrived, a real estate platform company backed by investors such as Jeff Bezos, helps investors get into SEC-qualified investments in real estate, including rental homes, vacation rentals and diversified funds.

Along with any property appreciation, Arrived’s properties can help you earn a passive income stream without any of the extra work that comes with being a landlord. No midnight maintenance calls over burst pipes required.

All you have to do is sign up, then you can view a selection of vetted properties and start investing with just $100. That way, you can make sure the platform is right for you.

Once you become an investor with Arrived, you’ll have access to more than 596 properties in 67 plus markets. Once a property is fully funded, you can also take advantage of Arrived’s secondary market after six months if you want to reshuffle your portfolio.

And, for a limited time, investors can get a 1% account match when opening an account and adding $1,000 or more.

5. Create a lifestyle plan

Finally, don’t forget that all your financial plans ultimately hinge on your desired lifestyle. That means you need a lifestyle plan just as much as a withdrawal or tax plan. If you want to spend more time traveling, don’t neglect that in your annual budget.

If you’re five years away from retirement, test the retirement lifestyle with a short break and see what you enjoy doing with your leisure time. This is the perfect opportunity to build a lifestyle plan for your golden years.

And if you find out that you need to cut back in order to make that dream lifestyle happen, well then, it might be worth building a clearer budget. Aggressively budgeting in the lead up to retirement can also afford you the opportunity to take that extra cash and funnel it into any of the strategies discussed so far.

But managing your budget, especially if juggling your other retirement considerations, can be a lot of extra work. This is when it can pay to get a little help with a top-down view on your finances.

Build a better budget

One option is to use Monarch Money’s expense tracking system to make managing your finances easier. The platform seamlessly connects all your accounts in one place, giving you a clear view of where you’re overspending, and where you might be able to pinch pennies.

By linking your credit card accounts, you can monitor your payment progress in real-time and set specific goals to get meet your retirement goals faster.

Even better, for a limited time, you can get 50% off your first year with the code WISE50.

Tags: