July 10, 2026
When your planned retirement date is drawing near, taking these actions could help bolster your portfolio.
After decades of working and saving, you can finally see retirement on the horizon. But now isn't the time to coast. If you plan to retire within the next 10 years or so, there are steps you can take now that will help ensure you'll have what you need to enjoy a comfortable retirement lifestyle.
Start by envisioning the kind of retirement you want. Will you work part-time? Volunteer? Travel? That exercise will help you develop a realistic picture of your financial resources and determine if your expected income will be sufficient to support your plan. Then follow this five-step plan to make the most of this countdown to your retirement.
How do you prepare for retirement?
1. Calculate your likely retirement income
Your future retirement income may come from predictable sources like
Go to third-party website Social Security popup and an employer-sponsored pension plan, plus any wages you earn, perhaps from a part-time job. But withdrawals from your retirement plans, savings and investment accounts may be the most important contributor.
To
make these assets last throughout your lifetime, the old rule of thumb was that you could afford to spend 4% of your portfolio annually in retirement. So if you have $1 million in retirement assets, you could expect to withdraw roughly $40,000 per year. "Four percent is a good starting point, but it can also be overly simplistic," says Anil Suri, managing director in the Chief Investment Office at Bank of America. "Your own rate of withdrawal should be personalized and based on a variety of factors, such as age, gender and risk tolerance."
Setting a withdrawal rate
The rate at which retirees can prudently draw down their savings in retirement depends on age and risk tolerance. Using these rates as a guide will allow retirees to be 90% certain of not exhausting their wealth in their lifetime.
Retirement Age |
What's a Sustainable Rate? |
| 60 |
3.54% |
| 65 |
3.85% |
| 70 |
4.18% |
| 75 |
4.63% |
Source: "Determining sustainable retiree spending rates: Beyond the 4% rule," Chief Investment Office, Asset Allocation and Portfolio Construction Analytics, January 2026.
2. Estimate future expenses — including housing and healthcare
After you add up Social Security and pension income and withdrawals from your retirement accounts and other savings, the next step is calculating whether that income supports the retirement you envision. Start by examining what you spend now — on both necessities and discretionary categories like travel and dining out — and project how those expenses might change once you've retired. Housing and healthcare are two of the biggest variables to consider.
Where you retire could have a big impact on your expenses. For example, downsizing or relocating to a low-tax state could sharply reduce costs and free up income for other priorities, whereas choosing to live near family in a high-cost area or moving to a cosmopolitan city could require economizing elsewhere.
TIP
Make full use of a tax-advantaged
health savings account (HSA) if you are eligible. Money you don’t spend on current health costs can compound tax-free until you withdraw funds for qualified medical expenses in retirement.
3. Adjust your plan to stay on track
If you find there is a gap between your estimated retirement income and expenses, think about how to accumulate the additional assets you need — or adjust your vision to match your resources. Doing this exercise well in advance of retirement gives you time to make any needed changes. By analyzing your current expenses, you may identify discretionary items that can be eliminated or reduced. "If you look at everything you purchased over the course of a month, you may be surprised at how much you can cut back to have more money to invest for your retirement," says Suri.
Other options for boosting your retirement funds include postponing your retirement date and deferring Social Security payments (each year you delay after your full retirement age, your benefits grow by 8%, until age 70). The longer you put off tapping into your retirement nest egg, the more likely your savings will last.
4. Invest for growth and maximize tax-advantaged savings
It can be tempting to shy away from stocks to reduce risk, but the potential for continued growth is still important at this stage of your life. Maintaining a
diversified mix of stocks, bonds, mutual funds and other assets that fits your risk tolerance, investment time horizon and liquidity needs may help you weather market downturns and support the income that you will need in a retirement that could last more than three
decades.Footnote 1At the same time, make the most of tax-advantaged retirement accounts. Whenever possible, contribute up to the maximum allowed in your 401(k), IRAs or other qualified plans, and aim to put enough into your 401(k) to capture any employer matching contributions. If you're age 50 or older, you can make additional catch-up contributions (plan rules permitting), which can help boost your retirement savings. See our
annual contributions limits guide (PDF) for details.
TIP
As you near retirement, consider these moves:
- Consolidate IRAs with one institution to simplify investment management and provide a clearer picture of your total retirement assets.
- Review any old 401(k)s and learn about rollover options.Footnote 2 A tax professional can help you weigh the pros and cons.
5. Get your debt under control
Consider accelerating your mortgage payments so the loan will be paid off before you retire. To curb new credit card debt, try paying cash for major purchases. By limiting new debt and reducing existing debt, you can minimize the amount of retirement income that will be spent on interest payments. "If you pay off a credit card that charges 15% interest, it's like earning 15% on a risk-free investment," says Suri.
Make the most of this valuable window of time
When your planned retirement date is a decade away, it can seem like a distant event. But it's important to plan carefully and set realistic goals so that time is on your side and can help you have the means to enjoy the sort of retirement you have always dreamed of.
Even if you started saving and investing for retirement late, or have yet to begin, it's important to know that you are not alone, and there are steps you can take to
increase your retirement savings. "It's never too late to get started," Suri says.
Frequently asked questions:
How much can I contribute to my 401(k) and IRA if I'm 50-plus?
In 2026, you can contribute $24,500 to a 401(k) or other workplace retirement plan, plus an additional $8,000 if you are age 50 or older (if you are age 60 to 63, the catch-up amount is $11,250). In 2026, you can contribute $7,500 to an IRA, plus another $1,100 if you are 50 or older. The IRS typically makes
Go to third-party website cost-of-living adjustments to these limits popup every year. See our
annual contributions limits guide (PDF) for more.
Is the "4% rule" still valid?
The rule of thumb that you can withdraw 4% of your retirement savings every year and have them last throughout your lifetime is just that: a general rule. The amount you can safely withdraw will depend in part on your tolerance for risk and the age at which you retire and begin spending your savings. If that's at age 60, you may want to take out less than 4%, and if you retire at age 70 or later, you may be able to withdraw more than 4%.
What health costs will Medicare not cover?
Go to third-party website Medicare popup is made up of several different plans: Parts A and B (Original Medicare), Part C (Medicare Advantage) and Part D (prescription drug coverage). Depending on what plan you choose, you may not have Medicare coverage for dental, vision and hearing expenses, and you may face deductibles and co-pays. Medicare Supplement Insurance (or Medigap) helps cover some of the expenses Original Medicare excludes. Regardless of the plan, Medicare does not cover the costs of long-term care.
Opinions are as of 06/03/2026 and are subject to change.
Footnote 1 Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results. Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Footnote 2 You have choices about what to do with your 401(k) or other type of plan-sponsored accounts. Depending on your financial circumstances, needs, and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over a 401(k) from a prior employer to a 401(k) at your new employer, take a distribution, or leave the account where it is (if applicable). Each choice may offer different investments and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information, visit
our rollover page or call Merrill at 888.637.3343.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Bonds are subject to interest rate, inflation and credit risks.
Opinions are subject to change due to market conditions and fluctuations. Any investments or strategies presented do not take into account the investment objectives or financial needs of particular investors. It is important that you consider this information in the context of your personal risk tolerance, time horizon, liquidity needs and investment goals. Not all recommendations will be in the best interest of all investors. Always consult with personal professionals before making any investment decisions, including a tax advisor.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
This material should be regarded as educational information on Social Security and is not intended to provide specific advice. If you have questions regarding your particular situation, you should contact the Social Security Administration and/or your legal advisors.
This material should be regarded as educational information on healthcare and is not intended to provide specific advice. If you have questions regarding your particular situation, you should contact your healthcare, legal and/or tax advisors.
Long-term care insurance coverage contains benefits, exclusions, limitations, eligibility requirements and specific terms and conditions under which the insurance coverage may be continued in force or discontinued. Not all insurance policies and types of coverage may be available in your state.
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