Retirement Income Planning: What to do 5, 10, and 20 years out

A confident retirement doesn’t happen by accident. It’s the result of years of thoughtful preparation—layered decisions about savings, investments, taxes, healthcare, and lifestyle. But knowing what to focus on and when can feel overwhelming.

Breaking the journey into 20-, 10-, and 5-year milestones makes retirement income planning clearer, more intentional, and far more achievable. Here’s what to prioritize at each stage.

20 Years Out: Build the Foundation

When you’re two decades from retirement, time is your greatest advantage. Your decisions now—especially around savings and investment discipline—create the base your future income will depend on.

1. Maximize Long-Term Growth

This is your high-accumulation phase. Focus on:

• Contributing consistently to 401(k)s, IRAs, and investment accounts

• Maintaining a growth-oriented investment mix

• Automating contributions to stay disciplined through market cycles

  
  

Small increases now (even 1–2% more savings per year) compound dramatically over 20 years.

2. Reduce High-Interest Debt

The less you owe later, the more income you keep. Prioritize paying off:

• Credit cards

• High-rate personal loans

• Unnecessary consumer debt

  
  

Financial freedom in retirement begins with building margin today.

3. Protect Your Earning Power

Your income is still your largest asset. Make sure it’s protected by evaluating:

• Disability insurance

• Life insurance

• Employer benefits

• Emergency savings

  
  

Unexpected setbacks early can derail long-term plans if you’re not prepared.

4. Start Visualizing Your Desired Retirement Lifestyle

You don't need exact details yet, but clarity helps guide decisions. Consider:

• Where you may want to live

• The lifestyle you want to maintain

• Whether you envision working part-time by choice

  
  

Think big picture. You’ll refine these goals as retirement approaches.

10 Years Out: Start Shifting From Growth to Strategy

A decade away, retirement becomes more real—and your planning needs to become more precise. This is when you shift from simply accumulating wealth to preparing it to serve as reliable income.

1. Stress-Test Your Retirement Income Plan

Evaluate questions like:

• What will your income sources be—Social Security, pensions, investments?

• Will you have enough to cover essential vs. discretionary spending?

• Does your investment mix support sustainable withdrawals?

  
  

This is the perfect time to build or refine a formal plan with an advisor.

2. Evaluate Tax Strategy

Tax planning becomes essential as you approach the withdrawal years. Look at:

• Whether Roth conversions make sense

• How to reduce future Required Minimum Distributions (RMDs)

• Timing of Social Security claiming

• Multi-account withdrawal sequencing

  
  

A strong tax strategy can add years to your portfolio’s life.

3. Pay Down Remaining Debts

Aim to enter retirement with:

• No credit card balances

• No high-rate loans

• Ideally, a paid-off mortgage (or a clear payoff plan)

  
  

Fewer fixed expenses mean more flexibility in retirement.

4. Revisit Your Risk Exposure

You don’t need to abandon growth, but you do need to reduce vulnerability to major market drops. This is where:

• Rebalancing

• Gradual de-risking

• Diversifying income-producing assets

… begin to play a larger role.

5 Years Out: Prepare Your Income Engine

Now retirement isn’t theoretical—it’s approaching fast. Your focus shifts to protection, precision, and building a reliable income system.

1. Lock in Your Withdrawal Strategy

This includes:

• Determining your withdrawal rate

• Mapping which accounts to draw from first

• Coordinating withdrawals with tax brackets

• Planning for Social Security timing

  
  

This is the stage where mistakes can cost the most—having a well-tested plan is critical.

2. Build a Cash + Safety Bucket

Most retirees benefit from a multi-bucket income system:

• Short-term bucket: 1–3 years of cash and stable assets

• Mid-term bucket: Bonds and income-generating investments

• Long-term bucket: Growth assets to outpace inflation

  
  

This structure helps protect against market downturns and sequence-of-returns risk.

3. Finalize Healthcare Planning

Healthcare costs are among the biggest variables in retirement. Evaluate:

• Medicare options

• Gap coverage

• Long-term care insurance

• Employer retiree benefits (if applicable)

  
  

Planning early gives you more options and minimizes surprises.

4. Confirm Lifestyle and Housing Decisions

Ask yourself:

• Are you staying in your home or downsizing?

• Will you relocate?

• What will your regular monthly expenses look like?

  
  

Your lifestyle assumptions directly shape your income needs.

A Final Note: Start Sooner, Adjust Often

Retirement planning isn’t a one-time event—it’s a lifelong strategy. Whether you’re 20, 10, or 5 years away, each phase builds on the last.

At MPM Advisors Group, we help clients:

• Structure long-term income plans

• Optimize taxes before and during retirement

• Align investments with retirement timelines

• Reduce risk and increase confidence

• Prepare families for generational transitions

  
  

The earlier you start—and the more intentionally you update your plan—the more control and clarity you’ll have over your retirement future.