The 24-Month Glideslope to Retirement: A Timeline of Decisions You Can’t Afford to Miss
Most people think that retirement begins the day that everything stops: the early morning alarm, the commute, the meetings, the deadlines, and, of course, the paycheck.
But in my experience, a successful retirement begins 24 months before your last day on the job.
Your final two working years are arguably the most critical period of your financial life. They determine your tax flexibility for the next decade, your confidence in your income stream, and your ability to adapt when life doesn't go according to plan. While no one can predict the future, with comprehensive financial planning, you can build a robust margin for error that will act as a safety net throughout your retirement.
When you're landing a plane, you don’t just cut the engines at 30,000 feet and hope for the best. You begin a gradual, calculated descent towards the airport environment and ultimately the runway.
Retirement is no different. The smoother and more intentional the glideslope, the safer the landing.
Why the Last 24 Months Matter More Than You Think
Because you've never had more financial leverage.
For most professionals, your last two working years are your highest-earning.
It's also likely that you have the widest tax planning window, opportunities, and options.
And, finally, many key financial decisions are still reversible -- including the decision to retire. While we usually advise seniors not to delay retirement longer than they have to, if life forces a major change to your financial plan while you're still working, then continuing to work and earn for another year or two is at least still an option.
So, the goal of the 24-month glideslope isn't to create a "perfect" plan. The goal is to glide into a retirement that is optional, flexible, and resilient.
Here is how we help folks time the descent at Keen Wealth:
24–18 Months Out: Laying the Foundation
Key Objective: Clarity and Optionality
Two years out, begin sketching your retirement blueprint, and work with your financial advisor to determine if retirement in two years is a realistic option.
Key Decisions
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Confirm what you’re retiring to (friends and family, hobbies, volunteering), not just what you’re retiring from (your job).
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Stress-test your retirement plan against:
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Market downturns
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Rising healthcare costs
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Longevity scenarios
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Analyze your portfolio risk relative to your income needs via computer simulations and consultation with your advisor.
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Create spending “buckets” and a preliminary withdrawal sequence based on what kinds of assets you have.
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Begin multi-year tax planning (rather than just prepping every April!) to control your lifetime tax liability.
Common Mistake: Focusing on net worth instead of cash-flow durability.
Hitting your “number” isn’t a reason to retire in and of itself. Your financial plan needs to be flexible enough to guide you through a wide range of scenarios for the next two or three decades. And you need to feel confident enough in your plan to stick with it through some inevitable ups and downs.
18–12 Months Out: Designing the Income Engine
Key Objective: Reliability, Not Optimization
With a year and a half to go before retirement, it’s time to start figuring out how to use your assets to replace your paycheck. A solid income engine starts with a stable base of reliable income sources you can count on while we adjust more volatile sources to meet your needs.
Key Decisions
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Distinguish between:
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Guaranteed income (Social Security, pension, cash)
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Portfolio-driven income (securities, retirement accounts)
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Flexible “buffer” income (cash reserves, short-term bonds) you can tap into during a market downturn or a personal emergency.
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Determine how much cash to hold heading into retirement and how much should be used to pay down debts (credit cards, vehicles, mortgages) or top off retirement accounts.
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Coordinate:
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Withdrawal sequencing
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Tax planning
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Potential exposure to Medicare premium surcharges
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Your prior two years of income determines if you are subject to an Income-Related Monthly Adjustment Amount (IRMAA). Strategies such as charitable contributions and tax-loss harvesting during the two years before you sign up for Medicare could save you thousands of dollars in annual premiums.
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Evaluate whether working part-time would give you more financial flexibility – and help you organize your time.
Common mistake: Assuming income will “figure itself out” after retirement.
Without a comprehensive plan that ties together withdrawal sequencing, tax liability, and health care, you risk triggering unnecessary taxes, spending too much too soon, and depleting tax-advantaged accounts that could have kept building your wealth for the later stages of retirement.
12–6 Months Out: Locking in Irreversible Choices
Key Objective: Precision and Timing
The choices you make during this window are often permanent, or at least more restrictive once you do retire.
Key Decisions
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Pre-Medicare income planning to maximize possible subsidies
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Medicare enrollment and plan selection for those over 65
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Social Security timing
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Pension elections
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Large charitable contributions to your DAF while you’re still earning income
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Establish emergency cash reserves and short-term spending buckets
The Common Mistake: Making permanent decisions with incomplete analysis.
Ticking the "Joint and Survivor" box on a pension payment plan might seem like the best choice for a married couple … Unless they also have robust life insurance policies and cash reserves.
Taking Social Security early might make a nervous retiree feel more confident about their income floor now … But maxed-out benefits might be even more useful during the later stages of retirement.
Every choice you make about one piece of your retirement plan is going to affect another piece. It’s vital that you work with your advisor to game out every scenario so you can make the best possible holistic plan.
6 Months to Retirement: Operational Readiness
Key Objective: Confidence on Day One
This is it! In the final stretch of your glideslope, the focus shifts to execution. While your advisor puts the finishing touches on your comprehensive plan, you can prepare to make the switch from building your nest egg to living off of it.
Key Decisions
Automate income flows to replace your paycheck and provide some continuity.
Confirm tax withholding strategy from portfolio withdrawals and Social Security benefits to avoid any surprises in April.
Review access to your accounts and finalize your withdrawal sequencing.
Common Mistake: Treating retirement like a lifestyle change instead of a system change
We often recommend that pre-retirees “rehearse” how their cash flow is going to work for the first year of retirement, just so that they get a sense for how their money will be moving through their accounts. The more comfortable you feel with your new “system” before retirement, the more confident you’re going to feel about enjoying retirement.
Don’t Miss Your Runway
As I discussed above, some decisions that you make in the 24 months before retirement are very difficult or expensive to reverse, such as taking Social Security.
Others, like timing charitable contributions and other deductions to lower your income ahead of Medicare eligibility, have windows that close.
Failing to manage your lifetime tax liability and withdrawal sequencing early in retirement could lead to higher taxes on large required minimum distributions later in retirement.
And if you don’t take time to envision your life without work and learn to trust your nest egg’s ability to support your Golden Years, the emotional transition into retirement is going to be just as trying as the financial transition.
Don’t fly into retirement by the seat of your pants. Make an appointment to visit Keen Wealth and we’ll start working on a glideslope that can help you land safely in retirement and prepare you to soar into your next chapter.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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