The Five-Year Window: Why Everything Changes Before You Retire

There's a moment in every great championship run where the game changes. Not in the finals. Not even in the playoffs. It happens in those final weeks of the regular season when teams stop playing for stats and start playing for position.

That's exactly what the five years before retirement feel like.

You're not building anymore. You're transitioning. And most people completely miss this shift.

They keep playing the accumulation game—chasing returns, maximizing growth, thinking bigger is always better. But retirement isn't about having the biggest pile of money. It's about transitioning smoothly from earning a paycheck to living off what you've built.

Get this window right, and you'll enter retirement with confidence and freedom. Get it wrong, and you'll spend your first few years stressed and second-guessing everything.

I'm Josh, and I've personally helped over 500 people navigate this exact transition. Today, I'll show you the three strategies that separate retirees who thrive from those who struggle.

Here's what most people don't realize: the five years before retirement are usually your highest-earning years ever.

You're at the top of your career. Your income has never been higher. The kids might finally be out of the house, so your expenses are actually lower.

And yet, most people keep contributing the same amounts they've been contributing for years.

They're leaving massive money on the table.

Starting at age 50, the IRS lets you make catch-up contributions to your retirement accounts. For 2025, that's an extra $7,500 on top of the standard $23,500 limit—bringing your total 401(k) contribution to $31,000 per year.

But here's where it gets really interesting.

If you're between ages 60 and 63, there's a super catch-up provision:

Think about the impact. One of my clients, a surgeon, came to me at 58. She'd been contributing for decades but always just the standard amount. Over the next seven years until retirement, she added nearly $200,000 just from maximizing catch-ups. Combined with growth, that strategy gave her an extra $400,000 in retirement security.

That's not a small difference.

Your action step: Call your HR department or 401(k) provider today. Ask them to increase your contributions to include the maximum catch-up for your age. Don't wait until next year. Every month you delay is money you can never get back.

This is where most people completely miss the boat.

When you're working and earning a paycheck, cash is almost an afterthought. You keep a little in checking. Maybe a small emergency fund. But the rest goes into investments because you're in accumulation mode.

Retirement flips this entire equation.

In retirement, cash isn't just for emergencies. It's one of your most powerful strategic tools.

By the time you retire, you should have 12 to 18 months of living expenses sitting in cash. Not just basic expenses—everything. Your mortgage, travel plans, property taxes, even the taxes you'll owe on retirement distributions.

Why so much? Three reasons:

I worked with a couple—both teachers—who retired at 62 with about $2 million saved. They'd done everything right. Maxed out their 403(b)s. Invested wisely. But they had almost no cash reserves. About $10,000 in checking.

They retired in early 2022. We all know what happened that year. Markets plummeted. Stocks and bonds both dropped fast.

Suddenly, they were terrified. They wanted to take a trip to Europe but were afraid to spend because they'd have to sell at a loss. They felt trapped by their own plan.

If they'd had 18 months of cash, that year would have felt completely different. They could have lived off reserves, let the portfolio recover, and enjoyed their first year without stress.

Don't make that mistake. Build your cash position now, while you're still earning.

Quick note: This doesn't contradict Strategy One. If you can max your 401(k) AND save cash, you're in the perfect spot. If you can only do one, it becomes more of a balancing act.

This is the one that separates happy retirees from those who struggle.

And almost nobody talks about it.

Here's the truth: You can have $5 million in the bank, but if you retire without a plan for how you'll spend your time, you're going to be miserable.

I see this constantly. Someone retires with plenty of money. They're financially secure. But within six months, they're bored, restless, wondering if they made a mistake.

Why? Because they spent decades focused on accumulation and zero time thinking about what retirement would actually look like.

There's a Harvard study—one of the longest-running studies on human happiness—that's been going on for over 80 years. One of the clearest findings? People who stay active mentally and physically, and who maintain strong social connections, report significantly higher levels of happiness and live longer, healthier lives.

Good relationships and purpose aren't just nice to have. They're essential.

Think about it. For most of your adult life, work has provided structure. It's given you a reason to get up. Connected you with people. Given you purpose and identity.

When that disappears overnight, it can feel disorienting. Even lonely.

So during these five years, start building the framework for what comes next:

I met with a client recently who absolutely nailed this. He retired two years ago at 63. Before retiring, he joined a local club. Now he plays golf daily with a group of about 50 peers. Paddle tennis three times a week. Walks on the beach every morning.

He's lost 40 pounds since retiring. He told me he's the healthiest he's been in decades.

Not because he became a fitness guru. Because he intentionally built a lifestyle that keeps him active and connected. He didn't wait until retirement to figure it out. He started planning while still working.

Don't just retire from something. Retire to something.

Have a vision for what your days will look like. Start building toward that vision now.

Let's recap what you need to focus on during the five years before retirement:

First, maximize your peak earning years. Take full advantage of catch-up contributions, especially if you're 60–63 and qualify for super catch-up. Every dollar you add now has massive impact.

Second, start thinking about cash differently. Build 12 to 18 months of expenses in reserves. This gives you flexibility for tax planning, insulation from volatility, and freedom to enjoy those early years without stress.

Third, plan your lifestyle, not just your finances. Start building the hobbies, routines, and social connections that will give your retirement purpose. Money is important, but it's not everything. The happiest retirees have a clear vision for how they'll spend their time.

These strategies aren't complicated. But they require intention. They require you to shift your mindset from accumulation to transition.

And they require you to start now.

One more thing: Consider stress-testing your plan. One of my clients completely stress-tests his retirement plan twice a year during each of the five years before retirement. We run scenarios for everything—long-term care events, higher inflation, extended periods of zero returns.

That mental clarity makes the transition so much easier. He's not wondering if his plan will work. He knows it will.

It's like preparing for a big trip. I love to travel, and before any major adventure, I do just enough planning so that when the experience arrives, I'm ready to enjoy it fully. I have two great photos on my website from a recent Costa Rica trip—exploring a waterfall and kayaking in calm ocean waters. Not scripted, but intentional.

Retirement planning is the same way. You don't need to script every day, but having a framework makes the transition so much more enjoyable.

The five years before retirement are the most leveraged years of your financial life. Small decisions during this window create massive results.

So here's my challenge: Which of these three strategies will you focus on first?

You don't have to do everything at once. But you do need to start.

Because five years goes by faster than you think.

Education only, not advice. Consult your professional(s).