If you plan to retire in 2026, the clock is ticking on decisions that could define your financial comfort for decades. With inflation lingering, tax laws shifting and Medicare costs rising, the final 12 to 18 months before retirement are critical.
Here are nine key retirement moves financial planners recommended you make now to avoid costly missteps later.
1. Shift From Investing to Income Planning
If you are within 12 to 18 months of retiring, your focus should change “from accumulation to distribution mode,” said Lynn Toomey, founder of Her Retirement. She recommended mapping exactly how each income source would work together to create a reliable monthly “retirement paycheck,” including Social Security, pensions, annuities and investment withdrawals.
The most overlooked and regret-worthy mistake is failing to coordinate withdrawal order and tax efficiency. “A tax-smart withdrawal strategy can add years to portfolio longevity,” she said.
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2. Build a ‘War Chest’ To Protect Your Money
Retirement requires something more robust than a basic emergency fund, but a “war chest,” said Marcel Miu, CFP and founder of Simplify Wealth Planning. “This is your buffer against sequence of returns risk.”
He recommended clients set aside five to seven years of income needs in stable assets, which he called, “the oxygen of independence.” This ensures you are never forced to sell your stocks during a bear market.”
Toomey recommended holding 12 to 24 months of cash for near-term spending, while Miu extended that stability further. Both agreed that liquidity and flexibility are a winning combination for retirement.
3. Project Healthcare Costs
Due to rising Medicare premiums and 2026 tax changes, retirees should estimate how their income will affect their Medicare costs. “Consider partial Roth conversions in 2025 before RMDs and potentially higher tax brackets kick in,” Toomey said.
Miu called this a “golden window for tax planning,” explaining that the “Roth conversion gap year … is the period after your last paycheck but before Social Security and RMDs begin. For many, this is the lowest tax bracket of their lives.”
4. Don’t Rely On Outdated Rules
The popular 4% withdrawal rule no longer works as neatly in a world of longer lifespans and higher costs. “Retirees must plan for sequence of returns risk and longer lifespans,” Toomey said. “Dynamic withdrawal strategies that adjust annually for markets and inflation are far safer than static rules.”
Miu agreed that flexibility is key in retirement. “Before retiring, we agree on the specific portfolio triggers that will prompt a spending adjustment, up or down. This formalizes the adjustment process and removes emotion,” he said.
5. Prepare For Taxes, Healthcare and Incapacity
Failing to plan for these areas can create some of the costliest retirement regrets. It is almost never the investment portfolio, Miu said, “but the non-financial ‘life admin’ tasks. The most catastrophic omission is failing to plan for incapacity.”
People spend all their time on a will and no time on a durable power of attorney. “This is a costly and emotionally devastating mistake for their families.”
He added that retirees often miss the Medigap guaranteed-issue window — the six months after enrolling in Medicare Part B when they could get any supplemental plan without medical underwriting. “Missing it can be a permanent and expensive error,” he said.
Chris Heerlein, CEO of REAP Financial, also stressed healthcare readiness. “I’ve seen people overlook Medicare timelines and end up paying penalties or losing coverage windows. Planning this early saves money and a lot of stress,” he said.
6. Rehearse Retirement Before It Starts
As best they can, future retirees are advised to test drive their lifestyles and budgets before the real thing. “Live for six months on your projected retirement budget and see how it feels,” Heerlein said. “Most people think they’ll spend less, but habits are hard to break. This test drive exposes gaps before they become problems.”
He also warned that retirees often underestimate taxes and overestimate how much they’ll earn from Social Security. “By the time they realize it, their budget feels tighter than expected,” he said.
7. Balance Growth, Liquidity and Debt
Carrying unnecessary debt is risky but so is keeping too little cash. “Liquidity is often underrated,” Heerlein said. People assume they’ll just draw from retirement accounts when needed, but that can trigger taxes or penalties. “Having a cash cushion, like six to 12 months of expenses in liquid form, keeps you from dipping into long-term assets during market downturns.”
8. Guard Against Behavioral Traps
The biggest retirement mistakes are often psychological, not mathematical. “One of the biggest traps is believing you’ll suddenly become a disciplined spender once you stop working,” Heerlein said. “It rarely happens.” Without structure, he warned, spending can creep up silently, especially in the first year when retirement still feels like a vacation.
Toomey sees the same behavior play out. “Two traps I see often,” she said, “‘I’ve saved enough, now I can finally spend freely,’ and, ‘I’ll just figure it out as I go.’ Both can lead to costly, irreversible mistakes.”
9. Finalize Your 2026 Retirement Checklist
The final year before retirement should be a time of tightening every screw in your plan. Toomey and Miu recommended including:
- Updated income and expense projections (with inflation stress test)
- A year-by-year Roth conversion and tax review
- Finalized Social Security claiming and Medicare plan
- A liquidity plan for the first few years of expenses
- Signed estate documents and beneficiary updates
- A lifestyle plan for time, health and purpose
Retiring in 2026 will require coordination between income, taxes, healthcare and behavior. As Toomey put it best, “Retirement readiness isn’t about picking a date. It’s about knowing exactly how your money, your health, and your happiness will work together once you step away from working for a paycheck.”
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This article originally appeared on GOBankingRates.com: Financial Planners: 9 Retirement Moves You’ll Regret Not Making If You Plan To Retire in 2026
