Readiness Issues to Review in Your Final Year or Two of Work
A practical review of the items worth checking before you leave your last paycheck behind.
Anyone within roughly one to two years of retiring who wants a structured review of what still needs attention before their last paycheck.
It's easy to focus on the big-picture question of whether you can afford to retire and overlook a handful of smaller, practical items that are much easier to fix while you're still working.
- Confirming your cash flow picture for the first year
- Bridging health coverage between work and Medicare
- Reviewing employer benefits and unused accounts before you leave
- Addressing debt before your paycheck stops
- Sizing an emergency reserve for retirement
- Thinking through the order you'll draw from accounts
- Building a plan for an early market decline
- Tracking paperwork deadlines tied to your last day
- 1
Confirm your cash flow picture for the first year
Build a real first-year budget rather than a rough estimate, including one-time costs like travel or home projects that tend to appear right after retiring. Compare that number against income sources that don't depend on markets, so you know exactly how much your savings needs to cover in year one. This exercise tends to be more reassuring, or more clarifying, than people expect.
Questions to answer- · What does a realistic first-year budget actually look like?
- · Which income sources are guaranteed regardless of markets?
- · How much of year one's spending needs to come from savings?
- 2
Plan the health coverage gap between work and Medicare
If retirement happens before Medicare eligibility, you'll need coverage for the gap — COBRA, a marketplace plan, or a spouse's employer plan are the usual options, each with different costs and enrollment windows. This decision needs to be made before your last day of work, not after coverage lapses. Confirm your options and deadlines at medicare.gov and healthcare.gov well in advance.
Questions to answer- · Will there be a coverage gap before Medicare eligibility?
- · What are the cost and enrollment differences between my options?
- · What is the exact deadline to elect coverage after my last day?
6 more sections in the full guide.
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- Review employer benefits and unused accounts before you leave
Unused vacation payouts, health savings account balances, stock compensation, and life insurance conversion options often have specific rules or deadlines tied to your termination date.
Includes: “What benefits or balances are tied specifically to my termination date?”
- Address debt while you still have a paycheck
Carrying a mortgage, auto loan, or credit card balance into retirement means paying it from savings rather than income, which changes the math on how long your savings needs to last.
Includes: “What debt will still exist on my planned retirement date?”
- Size an emergency reserve built for retirement, not for work
The reserve that made sense while you were working — sized around job loss risk — may not be the right size once your income depends on withdrawals and markets.
Includes: “How is my current reserve sized, and does that still make sense?”
- Think through the order you'll draw from accounts
Taxable, tax-deferred, and tax-free accounts each carry different tax consequences when withdrawn, and the order you draw from them can affect your tax bracket over many years, not just the first one.
Includes: “What account types do I have, and how are they taxed differently?”
- Build a plan for what you'd do in an early market decline
A market decline in the first few years of retirement affects a portfolio differently than one occurring later, because withdrawals during a downturn lock in losses that a recovery can't undo.
Includes: “What would our specific plan be if markets fell sharply in year one or two?”
- Track the paperwork deadlines tied to your last day
Retirement plan rollovers, pension elections, COBRA enrollment, and final paycheck or benefits questions often carry deadlines counted from your termination date, and missing one can be costly or irreversible.
Includes: “What deadlines are triggered by my last day of work, specifically?”
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Official sources
Rules change. Confirm anything that affects a decision against the current official source.
Where this fits in our work
This guide accompanies our retirement income planning work. Joe Donti meets with Arizona households by appointment — in the Scottsdale office, by phone, or on Zoom.
Related reading
This guide is general education and is not individualized investment, tax, legal, Medicare, or insurance advice, and it is not a recommendation to buy or sell any product or security. Investing involves risk, including possible loss of principal. Insurance and annuity guarantees depend on the claims-paying ability of the issuing carrier. Rules and figures change — confirm current details with the official sources above and with your own tax, legal, or insurance professional.