It's easy to assume that if you've been saving and investing consistently throughout your working years, you're on track for retirement. But the final 10 years before you leave the workforce can quietly rewrite the rules, turning small missteps into lasting consequences and smart adjustments into meaningful gains.
"I see it all the time: people come to us later than they should," says Kyle Hammerschmidt, founder of Mokan Wealth Management. "Not because they weren't paying attention, but because nobody told them how many changes there are in the final stretch before retirement."
That's because retirement planning goes far beyond portfolio performance. "Having someone manage your investments is not the same as having a retirement plan," Hammerschmidt says. While investment management focuses on returns, he points out that the real challenges lie elsewhere, such as taxes, required minimum distributions (RMDs), Medicare costs and Social Security decisions.
At the same time, your investment strategy may need a rethink. The last decade before retirement marks a fundamental shift in time horizon, from long-term growth to income sustainability, according to Russell DeLibero, a certified financial planner and chief wealth planning officer at Oxford Financial Group. With fewer years to recover from market downturns, volatility and liquidity take on new importance.
In other words, the rules that helped you build wealth aren't always the ones that will help you keep it. Here are five investing rules that will help you head into retirement with greater ease and security.
1. The What Do I Have Rule
You can't plan how to get where you want to go until you know where you're starting from. In the context of retirement planning, this means getting a holistic view of your current and future assets.
"Every 401(k), IRA, Roth, brokerage account, pension and Social Security estimate," Hammerschmidt says. "This is your retirement income machine."
Pay special attention to your various account types. Where your money is kept matters as much as how much you have, Hammerschmidt says. This is because the location of your assets determines their taxation.
Traditional IRAs and 401(k)s are taxed at your current income rate when you withdraw while Roth accounts can be tapped tax-free. Non-retirement accounts are often taxed at a lower rate than traditional retirement accounts, but all proceeds are still taxable.
"The order you tap these accounts will determine how much you actually keep," Hammerschmidt says. Ideally, you'll have retirement income sources from each bucket: pre-tax (traditional IRA and 401(k)), tax-free (Roth) and taxable (non-retirement). This gives you more control over your income taxes in retirement.
If you don't have Roth savings yet, Hammerschmidt says you can use Roth conversions to move money from a traditional account into a Roth.
This is also a good time to consolidate your accounts. "Scattered accounts lead to higher fees, greater complexity and more challenging tax planning," Hammerschmidt says. So if you have multiple accounts of the same type, consider combining them into one.
2. The Asset Allocation Assessment Rule
In this last decade, your focus should shift from accumulation to protection of what you have.
"As the final paycheck nears, the ability to recoup losses diminishes," DeLibero says. "Poor market timing immediately before or after retirement can permanently alter the sustainability of retirement cash flow."
The years immediately surrounding retirement are often called the "retirement red zone" because of their vulnerability to market swings. To mitigate this, experts advise adopting a more conservative asset allocation that centers on capital preservation rather than aggressive growth.
Equities are still an important component of your retirement portfolio to combat long-term inflation, DeLibero says, but increasing your allocation to more stable assets, such as bonds, can protect you from drawdowns.
It's also important to review your illiquid investments, such as private equity, to ensure your portfolio is structured to support your immediate spending needs in retirement, DeLibero says.
3. The Build-A-Bond-Ladder Safety Net Rule
A simple idea that "makes a huge difference in retirement" is to keep three to five years' worth of spending in laddered, short-term U.S. Treasuries, Hammerschmidt says. These are bonds that mature on a rolling schedule of zero to five years.
The reasoning behind this is that when stock prices drop — "and they will," Hammerschmidt says — you need somewhere to pull income from that isn't your stock portfolio. Without a safety-net bond ladder, you might end up forced to sell stocks at depressed values. "That's how retirees lock in permanent losses that take years to recover from," he explains.
A Treasury bond ladder gives you something to live off of when the market is down. And when it recovers, you can replenish the ladder and let your stock continue to grow, Hammerschmidt says.
"It's not glamorous, but it's one of the most practical tools I recommend to anyone within 10 years of retirement," he adds.
4. The Retirement Income Stress Test to Stress Less Rule
The last decade before retirement is the time to evaluate your retirement income strategy.
"Effective planning goes beyond setting savings goals; it requires determining a sustainable withdrawal rate and visualizing monthly distributions," DeLibero says. Advisers often use Monte Carlo simulations, which run your portfolio through thousands of future scenarios, to stress test these outcomes. The results will tell you your probability of a sustainable retirement.
Monte Carlo simulations can also reveal why assuming a steady rate of return on your portfolio is dangerous. "A 10% average return sounds great, but average and actual are two different things," Hammerschmidt says. "The gap between them is called standard deviation: the roller-coaster ride your portfolio takes to get there."
For example, with a 10% average return and 18% standard deviation, 68% of the time your returns will fall between -8% and 28%, he says. Nearly 100% of the time they'll be between -44% and 64%.
"That's an enormous swing," he says. "Build a plan that works in the real world, not just the average one."
One of the best ways to build safety in your retirement plan is to simply save more. The good news is that the IRS makes this easier than ever in the last decade before retirement with catch-up contributions. In 2026, individuals aged 50 and over can save an extra $1,100 in their IRAs and $8,000 into their 401(k)s and 403(b)s.
And don't forget to begin reviewing your pension payout options, too, if you have one, DeLibero advises.
5. The "Time It Right" Rule for Health Insurance & Social Security
Your investment decisions aren't the only ones that will impact your retirement plan.
"A primary concern is the potential insurance gap for those retiring before age 65, when Medicare eligibility begins," DeLibero says. You'll generally have seven months to enroll: the three months before you turn 65 through the three months after. If you retire before age 65, you may need to consider alternative coverage, such as COBRA or individual plans through the health care open marketplace.
"To further prepare for medical costs, individuals aged 55 and older may utilize HSA catch-up contributions to increase their tax-advantaged savings," DeLibero says. In 2026, the catch-up contribution is $1,000. You can then use your HSA funds in retirement just as you would traditional IRA or 401(k) savings.
"Deciding when to claim Social Security is also an important consideration," DeLibero explains. "While you can file as early as age 62, doing so results in a permanently reduced monthly benefit." To receive your full benefit, you must wait to claim until you reach your full retirement age. Each year you wait to claim after full retirement age, up until you turn 70, will further increase your benefit.
"The optimal time to file ultimately depends on your health, life expectancy and immediate income needs," DeLibero says.
6. Bonus: The "New Me" Rule
Preparing financially for retirement is crucial, but money isn't the only significant change that occurs when you leave the workforce. "Beyond the financial logistics, some of the most significant challenges in retirement are psychological, as the transition often requires a complete identity shift," DeLibero says.
During your working years, you likely derived a core part of your identity from your professional career. "Without a business card or job title, (you) may feel a sense of loss," DeLibero notes. As such, it's "essential to cultivate an identity independent of work." This can come from hobbies, social groups or community activities, any of which can become pillars for your daily life and self-worth in retirement, he says.
DeLibero suggests doing a "trial run" retirement by taking an extended period off to test-drive how you'll spend your days without work to fill the hours.
This shift can be even more challenging for couples who need to navigate their new relationship dynamic. "After years of separate professional lives, the sudden increase in time spent together can be both a joy and a challenge, requiring open communication and a new norm for the household," DeLibero says.
You may also find your new time freedom gives you space to reconsider fundamental lifestyle choices, such as where and how you live.
"Ultimately, retirement is not just a withdrawal from work, but a proactive design of a new life chapter," DeLibero says. And the steps you take in the decade leading up to it can shape how that chapter unfolds.
