As you enter your 50s and 60s, you’re in the “pre-retirement” decade. The planning you do now is critical for a secure future. It’s time to shift your mindset from simply accumulating wealth to strategically creating a reliable, lifelong income.

This is the time to get realistic about your circumstances. A clear-eyed evaluation today allows you to make the financial and lifestyle adjustments necessary for a confident retirement. This checklist can help you organize your review and identify any gaps in your plan—gaps that a product like an annuity may be designed to fill.

1. Take an Honest Financial Snapshot

Before you can plan, you must know your starting point. Be honest with yourself about your current financial health. Ask these key questions:

Where are you now? What is your total net worth?
Where do you want to be? What does your ideal retirement look like, and what will it cost?
What’s the gap? How large is the difference between what you have and what you’ll need?

This information will be the foundation for all your other decisions.

2. Review and Update Your Estate Plan

Financial planning isn’t just about assets; it’s also about protection. Legal documents must be updated as your life changes. Ensure you have the following in place:

A Will: Details how your assets should be distributed.
A Durable Power of Attorney: Appoints someone to make financial decisions on your behalf if you become unable.
A Living Will (Advance Directive): Outlines your wishes for medical care if you are incapacitated.

It is always recommended to consult an attorney to draft or review these essential documents.

3. Audit Your Future Income and Tax Impacts

When you stop working, your “paycheck” will be replaced by distributions from various sources. Consult with a financial planner and tax advisor to project your total retirement income.

Be sure to include all anticipated sources:

Social Security benefits (for you and a spouse/partner)
Pension or other retirement funds
Spousal or partner incomes
Distributions from investments (401(k)s, IRAs)

Crucially, you must understand the tax impacts on these distributions. Withdrawals from traditional retirement accounts are often taxed as ordinary income, and you may also pay taxes on:

Interest
Dividends
Capital Gains

A financial planner can help you build a withdrawal strategy that minimizes your tax burden, potentially using tax-deferred vehicles to manage growth.

4. Create a Realistic Retirement Budget

Your current budget will not be your retirement budget. While some costs will go down (like commuting), others may rise (like healthcare).

Make a detailed list of all projected expenses to maintain your lifestyle. Be sure to account for:

Basic living necessities (housing, food, utilities)
Healthcare and potential long-term care
Travel and hobbies
Inflation, which will continue to erode your purchasing power every year.

This budget isn’t just an exercise; it’s the “target number” your income plan needs to hit. The key question to resolve is: How will you guarantee you can cover these essential costs every single month?

5. Analyze Your Assets and Fill the Income Gap

Now, compare your list of expenses (Section 4) to your list of guaranteed income sources (like Social Security or a pension from Section 3). For most people, there is a significant gap.

Your job is to use your assets to fill that gap. You likely have two types of assets:

Liquid Assets: Cash, stocks, bonds, and mutual funds.
Fixed Assets: Real estate or business ownership.

The challenge is converting these assets into a predictable, reliable “paycheck.” This is where an annuity can play a critical role.

By allocating a portion of your portfolio to an annuity, you can create a guaranteed stream of income that you cannot outlive. This directly addresses the “how long will my money last?” problem by creating a stable floor of income to cover your essential expenses, perfectly complementing your other income sources.

6. Plan for Healthcare and Maximize Social Security

Two of the biggest factors in retirement are healthcare and Social Security.

Healthcare: Costs continue to increase annually. Even with Medicare, you will be responsible for premiums, deductibles, and out-of-pocket expenses that may not be covered. Review your options carefully.
Social Security: This was only ever intended to be a supplemental income source. Do not expect to live off this benefit alone. Your claiming strategy (e.g., waiting until age 70) can significantly impact your benefit, but it’s designed to be one part of a larger plan.

If your company offers an early retirement package, you’ll need to know exactly how and where to invest the bonus to take full advantage of tax benefits and retirement goals.

Your Next Step

Your 50s and 60s are the time to make adjustments, resolve concerns, and solidify your plan. A comprehensive financial review will give you a clear picture of where you stand and what moves you need to make.

As you evaluate how to fill your personal “income gap,” understanding how annuities can provide guaranteed, predictable income is a crucial part of a secure retirement plan.