Retiring during a recession presents unique challenges—but also rare opportunities. For those just five years out from retirement, this phase can either derail your financial plans or become a strategic launchpad. With the right mindset and planning, the final stretch before retirement can help you emerge more confident and better prepared, even in a shaky economy.

Resources:

• • FREE RETIREMENT READINESS REPORT 
  • 9 Reasons Not to Convert to a Roth in Retirement
  • Here Is What A $3M Retirement Portfolio Looks Like
  • Kitces: Finding The Optimal Rebalancing Frequency – Time Horizons Vs Tolerance Bands
    

    Rethinking the Final Stretch

    Most people view the last five years of work as a glide path into retirement. But when you’re retiring during a recession, coasting can be risky. Market volatility, inflation, and economic uncertainty mean you need to be more proactive, not less. This window is your chance to firm up your financial foundation while you’re still earning and have time on your side.

    Strategic Moves for a Recession-Era Retirement

    To retire successfully in a recession, your financial decisions must be more deliberate. Here are five powerful moves to consider:

    • Test Your Retirement Budget: Start living off your expected retirement income today. This will help you identify gaps or unrealistic expectations—before they become real problems.

    • Build Cash Reserves: Having 12–24 months of living expenses in cash or cash-like assets can prevent you from withdrawing from investments during a downturn.

    • Tax Optimization: Recessions often come with lower income and market values, making it a good time for Roth conversions or realizing capital gains at reduced rates.

    • Adjust Investment Risk: Don’t just default to conservative assets. Instead, align your risk tolerance with a thoughtful withdrawal strategy that considers income needs and market conditions.

    • Clarify Your Income Plan: Recessions often stress-test income assumptions. Build a plan that includes when and how to tap Social Security, pensions, IRAs, and taxable accounts.

    Navigating the Emotional Shift

    One of the hardest parts of retiring during a recession is the emotional toll. Fear of running out of money, anxiety about market losses, and uncertainty about your future can cloud judgment. That’s why this five-year window is not just about numbers—it’s about developing confidence in your plan and clarity about your purpose.

    Professional Guidance Pays Off

    Working with a financial advisor during this final stretch can make all the difference. From tax strategies to risk management and retirement income planning, objective guidance helps you avoid panic moves and uncover opportunities that a recession might actually amplify.

    Conclusion

    If you’re approaching retirement and facing a recession, now is the time to act—not pause. The five years before retirement are critical, and with the right strategy, they can empower you to retire with clarity, confidence, and control—even in uncertain times.

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This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you. Disclosures: https://onedegreeadvisors.com/solutions/#disclosures