5 Things You Can Do Right Now to Help Improve Your Retirement Outlook
When you're about five years away from retiring, take these five steps to complete your retirement masterpiece.

When most people think about retirement planning, they put the focus on growing their money. Their mood rises and falls with every roller-coaster turn of the daily stock market reports, or when they see the bottom line on their quarterly 401(k) statements.
But there's more to building a solid retirement plan, or what I call a "Retirement Masterpiece," than accumulating money. Eventually, you'll want to shift gears and preserve what you've built.
With that in mind, here are five things you can do right now to help improve your retirement outlook:

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Make an income plan.
As a financial adviser, the number one question I hear is, "How do I build a plan so that I won't run out of money for myself or my spouse during our lifetime?"
The answer is to start by figuring out how much money you'll need to cover your expenses, including fixed expenses (mortgage or rent payments, insurance premiums, etc.), variable expenses (clothing, car maintenance), debt (outstanding student loans for yourself or your children, credit cards) and any one-offs (a new roof, for example, or a big vacation you plan to take).
Your guaranteed sources of income, such as Social Security or a pension, will be used to pay those expenses. If they aren't enough, your adviser can help you find others.
2. Make a protection plan.
You probably wouldn't consider going without fire insurance for your home, even though the odds of your house burning down are low—about 3%.
Similarly, it's important to hedge against risks that can "burn down" your income plan. For one example, the chances are much higher than in the past that you'll have some kind of long-term care need that is expensive and ongoing, especially considering we are all living longer. As a result, you'll want to be prepared for this very real risk.
Some estate planning also is in order to protect yourself from taxes—particularly in states that have an estate tax, as the exemptions levels are usually much lower than the federal level. And you'll want to make sure that if one spouse passes away, the other will have enough income to last the rest of his or her life.
3. Make an appreciation plan.
Now that those first two pillars of your retirement plan are taken care of, it's time to talk about how to continue to grow your money.
Whether it's conservative or aggressive risk, it's up to you, because these are the dollars you will have left after you've built your income and protection plans.
4. Make a tax plan.
The goal, of course, is to keep your taxes as low as possible. (I'm a financial adviser and a Certified Public Accountant, but I'm also a former IRS agent. So tax efficiency is important to me.)
There are a variety of ways to do this. One example is to use separately managed accounts as opposed to mutual funds. Both are managed by professional portfolio managers, and they may even contain some of the same holdings. But owners of separately managed accounts have more flexibility to buy and sell securities in ways that have favorable tax consequences.
5. Make a legacy and estate plan.
To put to rest any concerns about taking care of loved ones in the future, consult with an attorney to be sure to get all the legal documents necessary to ensure the efficiency of your estate, including a health care power of attorney, financial power of attorney, health care directives, wills and trusts.
Smart strategizing also can help reduce estate taxes, so if you didn't address this in your protection plan, get to it during estate planning.
Perhaps you've already begun pushing the pieces of your own five-pillared retirement plan into place. Typically, five years prior to retirement is a good time to sit down with a financial adviser to prepare your "Retirement Masterpiece."
Chris Harlow is a Certified Public Accountant, Investment Adviser Representative and licensed insurance professional with NW Tax & Wealth Advisory Group, Inc.. He is also the company vice president.
Kim Franke-Folstad contributed to this article.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Chris Harlow is a Certified Public Accountant and CEO of Harlow Wealth Management, serving metropolitan Portland and southwest Washington to help clients craft their financial strategies for retirement. Chris’ past experiences have instilled in him a dedication to guiding clients through tax and retirement strategies. He has passed the FINRA Series 65 securities exam; holds life insurance licenses in Washington, Oregon and Arizona; and has his CPA license.
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
By David Dittman
-
Is Walmart Plus Worth It?
There are tons of exciting Walmart Plus benefits – but are they worth the $98 annual fee?
By Rachael Green
-
Three Options for Retirees With Concentrated Stock Positions
If a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
By Evan T. Beach, CFP®, AWMA®
-
Four Reasons It May Be Time to Shop for New Insurance
You may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS
-
Before You Invest Like a Politician, Consider This Dilemma
As apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
By Ryan K. Snover, Investment Adviser Representative
-
How to Put Together Your Personal Net Worth Statement
Now that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
By Denise McClain, JD, CPA
-
Bouncing Back: New Tunes for Millennials Trying to Make It
Adele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
By Alvina Lo
-
Early-Stage Startup Deals: How Do Convertible Notes Work?
Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
By Murat Abdrakhmanov
-
SRI Redefined: Going Beyond Socially Responsible Investing
Now that climate change has progressed to a changed climate, sustainable investing needs to evolve to address new demands of resilience and innovation.
By Peter Krull, CSRIC®
-
Here's When a Lack of Credit Card Debt Can Cause You Problems
Usually, getting a new credit card can be difficult if you have too much card debt, but this bank customer ran into an issue because he had no debt at all.
By H. Dennis Beaver, Esq.