The 24-Month Retirement Countdown: 13 Steps to Take Before You Retire
For most of your working life, you’ve likely heard retirement planning framed as a long game calling on you to contribute consistently, monitor your investments, and trust that decades of disciplined saving will eventually get you across the finish line. What often catches even diligent planners off guard, however, is that retirement success isn’t determined solely by what you’ve built but also by how you transition. This countdown builds on the fundamentals laid out in our comprehensive retirement planning guide, zeroing in on the final stretch before you retire.
The 24 months leading into retirement are a critical inflection point where the focus shifts from growing assets to generating sustainable income, with decades of abstract planning transitioning into real-life execution. Done thoughtfully, this transition can bring confidence and clarity. Done poorly, and it can trigger unnecessary taxes, avoidable risks, and a lingering sense of financial uncertainty.
As with planning for retirement, though, this period isn’t just about the numbers. It’s an opportunity to begin living the life you’ve planned for and a countdown during which you can test routines, refine expectations, and step into a new identity before it becomes permanent.
Wherever you're starting from — your 40s, your 50s, or your 60s — the final two years bring it all together. Even late starters can still boost their savings in this window.
Key Takeaways
- The final 24 months before retirement matter more than most people realize, shifting you from accumulation to income; decisions made in this window have outsized impact.
- A 90-day spending audit reveals what a single month can hide as one-time “atypical” expenses are shown to be typical.
- Living on your projected retirement budget for six months before you retire is the best stress test available.
- The gap years between retirement and RMDs are often the lowest-tax-bracket window of your adult life and a Roth conversion opportunity worth taking seriously.
- Plan what you're retiring into, not just what you're retiring from — the identity transition matters just as much as the financial one.
Phase 1: months 24–18 (the audit phase)
The first phase of the countdown is about replacing assumptions with a clear picture, calling on you to do the following…
1. Run a 90-day lifestyle audit
Many pre-retirees believe they have a solid understanding of their spending habits, yet the numbers are often incomplete or overly optimistic when they’re asked to estimate monthly expenses. Why? Because we often make financial assumptions based on best-case scenarios and forget that real life expenses often pop up whether that’s a new roof, big vacation, gifts for loved ones, etc. It’s why a detailed lifestyle audit is so important, tracking spending for a full 90 days to gain a level of awareness most people never have. Doing so reveals not only how much you spend but how and why you do so.
Real-life example: Susan’s retirement planning
Consider Susan, a 62-year-old marketing executive planning to retire at age 64. She initially estimates she’ll need about $4,500 per month in retirement. While this is perhaps the case during some months, tracking expenses for 90 days reveals $6,200 in actual monthly spending. Such a discrepancy may seem surprising, but let’s look a little closer. In December, Susan bought presents for various family members. In February, she put down a deposit on a summer vacation home with two of her closest friends. Then March rolled around and her refrigerator broke, requiring her to buy a new one.
Why a 90-day audit matters
Planning for the unplanned is difficult of course, but 90 days is long enough for at least some atypical expenses to arise; bringing awareness to them is an incredibly important exercise. When only tracking for a month, it’s easy to brush aside such costs. Susan could have looked at any individual month and downplayed one-time expenses, knowing she doesn’t buy presents every month, put down a deposit for a vacation, or certainly purchase a refrigerator. Why include them when budgeting for a “typical” month? Turns out, tracking expenses for 90 days often shows how months are rarely “typical.”
2. Recalculate your net income needs
Creating a more accurate picture of how much you’ll need to fund retirement isn’t just about the accuracy of your expenses but also your “income.” While your gross salary is the number you tend to focus on while you’re working, take-home income can look much different during retirement in the absence of payroll taxes and retirement contributions. Tax implications are a major component when it comes to understanding your needs, requiring both an awareness of how much you pay in taxes while working and how much you’ll pay in retirement. For reference, consider that retiree households—led by someone aged 65 or older—spent an average of $61,432 in 2024.
3. Eliminate consumer debt
Twenty-four to 18 months out from retirement is also the ideal time to confront debt with urgency. Carrying a mortgage into retirement may be manageable, but ongoing consumer debt often is not. Take John and Melissa, for example, both nearing retirement and both realizing they’re still carrying a car loan and several thousand dollars in credit card balances. Tightening their spending and using their final working bonuses strategically, they’re able to eliminate these obligations before retiring—freeing up nearly $900 per month in future cash flow.
4. Build a complete asset inventory
Finally, there’s the practical matter of organization. Over the course of a long career, it’s common to accumulate multiple retirement accounts, old employer plans, and scattered financial documents. Now’s the time to gather up everything to form one clear picture, a step that makes it much easier to build a cohesive income strategy.
Phase 2: months 18–12 (the dress rehearsal)
If the first phase is about understanding your financial life, the second phase is about experiencing it.
5. Live on your retirement “budget” for 6 months
Rather than waiting until retirement to see if your financial plan works, begin living it right now. For a full six months, restrict spending per your projected retirement income and set aside the difference between this amount and your current salary (ideally into a growing cash reserve). This exercise is eye-opening for many people. Take David, a 63-year-old engineer who plans to retire on $5,000 per month. His rehearsal period shows him that while his day-to-day expenses fit within this budget, occasional larger expenses (e.g., travel and home repairs) quickly push him beyond it; this realization allows him to adjust his expectations and increase his savings buffer before retiring rather than face an unpleasant surprise later on.
6. Build a healthcare bridge plan (if retiring before age 65)
Healthcare planning also becomes more tangible during this phase, particularly for those retiring before age 65. The cost of coverage through the individual market or COBRA can vary widely depending on income, location, and plan selection. Couples might find that by carefully managing their income, they qualify for significant subsidies under marketplace plans—reducing what initially seemed like an overwhelming expense.
- A detailed audit of where you stand today
- A clear read on your risks and opportunities
- A step-by-step roadmap through each phase of your countdown
7. Shift your portfolio for sequence of returns risk
During your working years, market volatility is often something you can afford to ignore. This changes during retirement, though, when the timing of market returns matters significantly. Experiencing losses early on in retirement while simultaneously withdrawing income can create lasting damage to a portfolio, known as “sequence of returns risk.” This concept is why many retirees set aside money to cover one to two years’ worth of expenses in more stable, short-term investments, essentially building a financial buffer. Should the market decline, they can draw from this reserve rather than sell investments at a loss: giving the rest of their portfolio time to recover and thus preserving its long-term potential.
Phase 3: months 12–6 (the strategy deep-dive)
With a clearer understanding of your lifestyle and a tested spending plan, the next phase focuses on refining the strategies set to shape your long-term financial outcomes.
8. Run a Social Security stress test
One of the biggest decisions in the lead up to retirement involves when to take Social Security. While this is often framed as a simple choice (either claim early or wait), the reality is far more nuanced. Delaying benefits boosts your monthly income, but it also requires you to draw more heavily from your portfolio in the interim.
Take Mark and Linda. Mark plans to claim Social Security at age 62 while Linda intends to wait until age 70; after evaluating their health history, income needs, and overall portfolio, however, they tweak their plan for Mark to delay his benefit as well. This, in turn, increases their guaranteed lifetime income and will provide more financial stability later on in retirement, particularly for the surviving spouse.
9. Plan a strategic Roth conversion for the gap years
Taxes also come into sharper focus during this stage, with the first years after retirement often presenting a unique opportunity. With a lower earned income and required minimum distributions not yet taking effect, you may find yourself in a lower tax bracket than at any other point in your adult life. If this is indeed the case, know that a lower tax bracket opens up the chance to perform strategic Roth conversions: voluntarily moving money from tax-deferred to tax-free accounts during these lower-income years to reduce future tax liabilities and create more flexibility later on in retirement. This strategy is in fact one of the most impactful long-term planning decisions some households make.
For a full map of the age milestones that drive these moves, see our guide to the key dates to remember as you approach retirement.
10. Max out your HSA in your final working year
Your final working year presents a last opportunity to maximize contributions to tax-advantaged accounts like health savings accounts (HSAs). As of 2026, the maximum contribution for a family is $8,750. HSAs provide triple tax advantaged savings; given the rising cost of healthcare in retirement, building a dedicated, tax-efficient pool of funds to cover medical expenses can provide both financial relief and a renewed sense of confidence.
Phase 4: the final 6 months (the logistics)
11. Schedule a “benefits exit” interview
Understanding benefit specifics is huge at this point, with seemingly small details (e.g., the exact end date of employer-sponsored health insurance) apt to have outsized consequences if misunderstood. Some plans extend coverage through the end of the month while others terminate immediately when an employee leaves; know this in advance to coordinate coverage and avoid costly gaps.
12. Consolidate accounts and simplify your income system
The last few months of your career is also the ideal time to simplify your financial life if you haven’t already: consolidating accounts, aligning your investment strategy, and creating a clear income-generation system all key to reducing stress. Retirement shouldn’t require you to manage a complex web of accounts and decisions but instead feel structured, predictable, and manageable.
13. Plan your identity transition
For decades, your schedule, social interactions, and sense of purpose are habitually tied to your work. While removing this structure often feels liberating, it can also feel disorienting. Imagine waking up on your first Tuesday in retirement at 10:00 a.m. What now? Those who transition most successfully into retirement are those able to answer this same question in advance. Whether it’s part-time consulting, volunteering, pursuing creative interests, or simply building new routines, the goal is to retire to something—not just from something.
If you're retiring in New Jersey: state-specific moves to layer in.
The 13 aforementioned steps apply to anyone retiring anywhere. If you're retiring in New Jersey, however, four state-specific dynamics are worth folding into your countdown.
The NJ pension and retirement income exclusion
New Jersey offers a generous state-level retirement tax break in that you can exclude qualifying retirement income—pension distributions, IRA and 401(k) withdrawals, and annuity payments—from NJ state tax for households below specific gross income thresholds. The exclusion phases down as income rises and disappears entirely above the top threshold ($150,000 for joint filers). The cliff is the part that matters as going even one dollar over removes the entire exclusion. A Roth conversion in Phase 3 (exactly the kind of move this guide recommends), meanwhile, can trigger thousands in state tax if it nudges NJ gross income past the line. Coordinate conversion timing with both federal brackets and NJ thresholds, knowing a federal-only analysis will miss this every time.
Social Security is not taxed at the state level
Unlike federal tax, New Jersey doesn't tax Social Security benefits at all: changing the after-tax math on your claiming strategy in Phase 3 with every dollar of the delayed-claim increase staying in your pocket. NJ pre-retirees often have a stronger case for delaying than residents of states that tax SS.
Property tax belongs in your audit and rehearsal
New Jersey has among the highest property taxes in the country. For many Garden State retirees, it's the largest expense line item after federal income tax. Build it into your 90-day audit in Phase 1 and your six-month dress rehearsal in Phase 2 in full. If downsizing is part of your plan, doing so earlier on in the countdown frees up monthly cash flow when you need the cushion most.
Healthcare bridge via Get Covered NJ
If you're retiring before age 65, you'll shop through the state marketplace (AKA Get Covered New Jersey). NJ supplements federal ACA subsidies with state-level subsidies that can reduce premiums to a not-insignificant degree depending on income. Price your options during Phase 2 (months 18-12), remembering that managing reportable income in your gap years affects the size of your subsidy.
The Vision difference
Retirement is often described as a destination, but in reality, it’s a transition calling for careful coordination across income, tax, investment, and lifestyle arenas. The final 24 months are where that coordination either comes together or falls apart. Every decision made during this period has a ripple effect. Social Security benefits timing influences your withdrawal strategy. Spending habits shape your tax exposure. Investment allocation determines income resilience during market volatility. When these pieces are aligned, retirement feels stable and intentional. When they’re not? Even a well-funded plan can feel uncertain, which is precisely why many people seek a structured, professional approach during this critical window.
Our “Am I On Track?” assessment is designed specifically for this transition as it brings together all moving parts into one cohesive plan looping in spending, income sources, tax strategy, and investment positioning. For a one-time cost of $590, you’ll receive a detailed audit of where you stand today, a clear outline of risks and opportunities, and a personalized roadmap guiding you through each phase of your countdown. You’ll also receive a 0–100 Retirement Readiness Score as a simple, objective measure showing how prepared you truly are.
Don’t kick off your countdown with a guess. Contact us to receive your professional 0-100 Readiness Score and personalized 24-month roadmap.
Reviewed for accuracy
Paul Muller, AEP®, CFP®
Founder and Relationship Manager at Vision Retirement, with 30+ years in the financial industry.
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Disclosures:
This document is a summary only and is not intended to provide specific advice or recommendations for any individual or business.
