Written by Alex Seleznev, MBA, CFP®, CFA and Alyssa Neece | Dec 17, 2025
I often find that the 5 to 7 years before retirement are the most critical for someone’s plan.
Making mistakes at this stage can have drastic consequences.
For example, shifting your investments to a much more conservative mix can hurt you in the long run, even if you don’t realize it at the time.
It may feel safer and more comfortable today, but that feeling can come at a real cost later.
On the other hand, if you’re not fully confident about your retirement readiness yet, having 5 to 7 years to go still gives you time to make some meaningful adjustments.
I know that at least some of you will soon be thinking about your New Year resolutions.
If one of them is to catch up on the progress of your well-deserved retirement, I have some practical ideas for you.
But first…
Review Your Expenses
There’s a good chance you’ll need to find room in your budget before we discuss other ideas.
The so-called “lifestyle creep” is a common issue.
You may have gotten promoted over the past few years, earning more income, but your expenses increased just as much.
As a result, you may still feel behind, even though you earn much more money today than you did in the past.
I’ve worked with many people who have struggled with this, so you are not alone by any means.
Once you determine the real problem, I suggest the concept of “paying yourself first.”
If you want to know more about it, check out our newsletter on this subject here: “Pay Yourself First.”
In short, it effectively forces you to save a certain amount (see below) and then you’re free to spend the rest.
Savings and Tax Minimization
Many say that the single most powerful tool for late-stage savers is the tax code itself.
I happen to agree, at least to a certain degree.
I’m sure many of you have heard about “catch-up contributions.”
If you participate in an employer-sponsored plan like a 401(k), 403(b), or 457(b), this is your primary opportunity.
The 2026 standard contribution limit for a 401(k) is set at $24,500.
But if you’re 50+, you can contribute an additional $8,000, for a total of $32,500.
Even better, those between ages 60 and 63 get an even higher catch-up amount of $11,250.
At the very least, now is the time to max out your employer’s matching contribution if you aren’t already doing so.
Think of your employer match as a 100% immediate, risk-free return on your investment.
As for Traditional and Roth IRAs, the 2026 contribution limit is $7,500.
And for those 50+, you can add an extra $1,100, bringing your total to $8,600.
If, for any reason, you cannot deduct your IRA contributions, consider making them anyway.
This would give you more options for Roth conversions in the future, but that’s a separate subject.
Just don’t forget the new rules around catch-up contributions in employer-sponsored plans.
Check out our newsletter on the subject here: “Big 401(k) Change in 2026: Catch-Ups Going Roth.”
Another great option, if you’re enrolled in a high-deductible health insurance plan, is to contribute to a health savings account (HSA).
They offer incredible tax advantages and act much like a “medical IRA.”
For 2026, the maximum amount you can contribute to your HSA is $4,400 for a single plan and $8,750 for a family plan.
And don’t stop there.
If you still have more you can contribute, there’s nothing wrong with investing in a taxable brokerage account.
In general, when it comes to planning for income in retirement, a great sweet spot for many of our clients is about one-third in a brokerage account and two-thirds in tax-deferred accounts.
Investment Strategy
It’s very possible that if you undersaved for retirement, you may need a more aggressive asset allocation.
This can be tricky for DIY investors.
You want to be invested in the market but also be careful not to take on too much unnecessary risk.
I know this is not an easy concept to grasp for many, so don’t be afraid to ask for professional help.
One more note of caution here is to be careful with target-date funds if you’re trying to do a catch-up plan.
In most cases, they automatically rebalance the allocation toward a more conservative mix every 3 to 5 years.
This is the design behind target-date funds, but it may not match your investment preferences or needs at the time.
It’s All About the Mindset
Now, let’s be real.
If, for any reason, perhaps even outside of your direct control, you significantly undersaved for retirement, it won’t be easy to catch up.
But it’s definitely possible with the right mindset.
As I’m writing this newsletter, I can think of a number of our clients who had very little savings in their 50s but ended up in a rather comfortable retirement situation.
They worked hard for it and had the right plan in place.
If you want to hear a real-life story, check out the conversation about “Ava K’s Journey to Retirement Success” to see how this approach worked in practice.
Feeling behind is a common experience and it can be a powerful motivator.
As I’m sure you know, the best time to plant a tree was 20 years ago.
The second best time is now.
So take that first step toward a more secure retirement today!