How to use a retirement checklist for five years out

The letter that exposes an unfinished retirement plan

The Medicare premium notice or tax estimate often shows up once the salary has stopped, and by then changing course feels awkward. A retiree sees that a withdrawal raised income more than expected, or that a missing stock record turned a sale into a larger reported gain. Ritholtz Wealth Management treats that letter as evidence that the cash-flow work began too late. A dated list would have put the income source, tax estimate, and benefit election on the calendar while there was still time to choose.

Three cash-flow setups: taxable first, IRA first, or a reserve

Your first withdrawal choice should reflect the account’s tax character and the job that cash must do, not a hunch about next quarter’s market. Taxable-account-first often suits a near-term gap when the account has high cost basis, meaning much of a sale is your own original investment rather than gain. IRA-first can make sense in an unusually low-income year, when adding ordinary income may be less costly than later. A separate cash and short-bond reserve is for someone who wants several years of known withdrawals without selling stocks after a decline.

The comparison is deliberately plain. It asks what income appears on the return, how much room you have to change course in a down market, and how long the first year’s cash lasts. Every investment can lose value, including money originally invested, so a reserve changes the timing of sales but does not erase investment risk.

Ritholtz Wealth Management uses the calendar as the working tool because benefit elections and cost-basis requests belong before the retirement month. Count each personal due date backward from the final paycheck. The calendar below assumes you will use investments or benefits to pay at least one recurring bill after work ends.

What each account sale puts on the tax return

What belongs on a five-year calendar?

A five-year retirement calendar should assign a personal due date to five checkpoints: spending, account records, withdrawal testing, income projection, and cash-transfer testing. Put the final-paycheck month at the center, then work backward because employer health coverage can change Medicare enrollment timing and a stock-basis request may take more than one follow-up.

The Social Security Administration estimate is useful for checking your expected benefit, not for guessing at a complete retirement paycheck. Download it while you can compare the earnings record with old W-2 paperwork. For employer stock, request cost-basis paperwork early; the broker may need purchase lots, plan records, or transfer history before Form 8949 can be completed accurately.

Put a personal due date beside every row, even if the task feels obvious. The IRS records taxable income, but it cannot tell you which account you intended to sell first or whether the bank link has been tested.

Put a due date beside paperwork requests

The 14 checks, in the order they matter

Five years gives you room to correct paperwork gaps and test a monthly withdrawal order before it becomes real. Start with the paycheck you will lose, then replace each part of it with a benefit, account sale, or reserve transfer. Olga’s example shows why the source of the cash matters as much as the dollar amount.

For illustration, Olga is 64, a widowed retired software architect with a paid-off house and a three-fund portfolio she ran herself for 25 years. She has $2.3M, yet her first-year spending gap is $4K a month, or $48K a year. Her taxable sleeve holds $80K with a $60K cost basis, leaving a $20K embedded gain. Selling $48K uses 60% of the sleeve: $48K ÷ $80K = 60%. The realized gain is 60% × $20K = $12K. A $48K traditional IRA withdrawal adds $48K to income, while the taxable sale adds $12K of gain, a $36K difference in MAGI before other income. The site’s calculator can test a different balance, gap, or cost basis.

That difference matters for Medicare. Ignoring the two-year Medicare IRMAA lookback can produce an unwelcome CMS notice. Take a single return at $109K or less: $1K more income pushes it into the next tier, and the 2026 Part B premium rises from $202.90 to $284.10, an extra $81.20 a month. CMS bases 2026 IRMAA on 2024 modified adjusted gross income, so write down large gains, IRA withdrawals, and other income before choosing the funding account.

Five to three years before the last paycheck

The final two years reveal the tax friction

• Five years out, check 1: Pick a target final-paycheck month and write it beside every task.
• Five years out, check 2: List core monthly spending, including property tax, utilities, and groceries.
• Five years out, check 3: Download your Social Security Administration benefit estimate and check the earnings record.
• Five years out, check 4: Request employer-stock cost-basis paperwork while plan records are easy to locate.
• Four years out, check 5: Inventory each account and beneficiary designation in one worksheet.
• Four years out, check 6: Collect pension or deferred-compensation election paperwork, if either applies.
• Four years out, check 7: List insurance premiums and debt payments that survive employment.
• Three years out, check 8: Write a provisional withdrawal order for taxable, IRA, and reserve assets.
• Three years out, check 9: Estimate taxable income under that order using the prior tax return.
• Three years out, check 10: Set aside a first-year spending reserve sized to the monthly gap.
• Two years out, check 11: Review health-coverage dates and Medicare enrollment timing with the employer plan.
• Final 12 months, check 12: Test bank-transfer timing with a small planned transfer.
• Final 12 months, check 13: Choose tax withholding or estimated payments and record each due date.
• Final 12 months, check 14: Rehearse the first 12 monthly withdrawals using actual account balances.

What changed since older retirement plans were made?

Older plans often assumed required minimum distributions began at age 70½. The IRS now starts RMDs at age 73, or age 75 for people born in 1960 or later. Ritholtz Wealth Management updates the calendar before relying on an old spreadsheet, because those extra years may change the value of planned IRA withdrawals or Roth conversions.

Converting in a low-income year can bring the tax bill forward. We write both versions down, with the bracket and the IRMAA tier for each year.

How do marriage, account size, and retirement date change the list?

Marriage, balance size, and the final-paycheck date change the order of the checklist, but they do not remove it. A single retiree maps one benefit record and one tax return. A couple must map two claiming ages, survivor-income needs, and whose account pays first. Below $100K, one missed tax or benefit detail can consume a large share of a year’s withdrawals; larger balances add concentration, IRMAA, and estate-paperwork questions.

An early retirement date puts health coverage and withdrawal penalty rules near the top. A later date moves RMD timing and Medicare income lookbacks closer to the front. If you do not know likely monthly spending or when work income stops, this list cannot replace a retirement-income estimate. Establish those two figures first, then use the checklist.

The first withdrawal review before cash leaves an account

Ritholtz Wealth Management would first separate accounts that can provide the next 12 months of cash from accounts meant for later years, then compare the taxable income created by each withdrawal choice. The review would also flag missing cost basis, beneficiary designations, and any income event that could affect Medicare premiums.