These Are the Most Critical Moves to Make in the 5 to 10 Years Before You Hang Up Your Hat

After years of strong market performance, many investors nearing retirement have seen their portfolios grow significantly. For much of your working life, growth is the goal. But what if retirement is right around the corner? How much risk should you still be taking on? I have more than 20 years of experience guiding clients through the complexities of retirement planning, and the answer to this requires a shift in mindset. As retirement approaches, the focus should gradually move away from chasing market gains and toward building income you can rely on. Retirement planning isn’t just about the marketMany investors watch market performance closely and feel anxious when volatility arrives. But retirement planning shouldn’t hinge on daily market swings.A strong retirement strategy is built around predictable income, money that continues to arrive regardless of what the stock market is doing. When that foundation is set, market fluctuations tend to matter far less.The goal is to make sure your income is guaranteed in retirement. Once that income plan is established, the equity market can still play a role, but it shouldn’t be responsible for paying your monthly bills. For retirees and those approaching retirement, relying entirely on market performance can create unnecessary risk, especially after a long period of strong returns.About Adviser IntelThe author of this article is a participant in Kiplinger’s Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.Why market success can create hidden riskRetirement account balances hit all-time highs in 2025, following years of continued growth in the stock market. According to Fidelity, the average 401(k) balance sat at $141,000at the end of March 2026, up 11% from the previous year. The average IRA rose considerably, up 7% year-over-year to $131,380. However, the combination of consistent contributions and strong market performance can lead to portfolios that are heavily exposed to market risk.To explain what I mean, consider this analogy from a casino floor in Las Vegas. If someone wins big at the card table, they rarely leave every dollar on the table for the next hand. Instead, they often pocket their winnings and continue playing with a smaller amount. The same logic can apply to retirement planning.After years of strong gains, investors may want to consider shifting a portion of their profits into safer strategies designed to produce income or preserve capital. That doesn’t mean abandoning the stock market completely. But it can involve leaving some of the original investment in equities while moving the gains into more stable vehicles.This approach can help investors still participate in future growth while also reducing the potential damage from a major market downturn.The critical five- to 10-year windowAs you near retirement, protecting against losses becomes more important than maximizing gains. That’s why I say that five to 10 years before retirement is the most crucial planning window.During this time period, investors begin transitioning from what’s called the accumulation phase of life, where the focus is on wealth building, to the distribution phase, where the goal is turning savings into income. Unfortunately, many people put off this important planning until the year before they retire. By that point, market conditions may significantly limit your options.Planning well before retirement will allow you to gradually adjust your strategy, potentially locking in favorable interest rates or income opportunities before economic conditions change for the worse.Creating guaranteed income in retirementMost retirees rely on a wide range of income sources to support their lifestyle, including Social Security, pensions and, in some cases, government or military benefits.However, for many households, these sources alone may not be enough to cover all of their expenses in retirement.That’s where your retirement savings come into play. 401(k)s and IRAs can often be converted into income streams that supplement those other sources of income.The goal is to create something that resembles the steady paycheck you relied on during your working years.The role of annuitiesOne low-risk tool I frequently see clients use to generate income in retirement is an annuity — more specifically, a fixed indexed annuity. These products offer features such as:Guaranteed lifetime incomePrincipal protection from market lossesGrowth linked to market indexesIncome options for spousesPotential death benefits for beneficiariesMany annuities also include income riders that allow retirees to receive income without fully surrendering control of their assets. This structure can provide both predictable income and continued account growth, depending on market performance. It’s important to note, however, that annuities are rarely intended to replace an entire investment portfolio. They are typically used to supplement other assets.Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.Balancing growth and stabilityWhile guaranteed income strategies can offer peace of mind, they also involve trade-offs. Liquidity is often the biggest concern for retirees, especially if they need access to funds for large purchases or unexpected expenses.That’s why I always stress the importance of having a balanced retirement strategy that includes dividing your assets into different buckets. You may designate a portion of your money to focus on guaranteed income sources like Social Security, pensions or annuities, while another portion is invested in stocks for growth over time to help offset inflation. Another portion might remain liquid, providing flexibility to ensure essential expenses are covered regardless of market conditions.Before jumping into any investment, it’s important to understand all the rules, restrictions and fees associated with it to make sure purchasing one is the right move for you.Steady income instills confidence in retirementFor many retirees I work with, it’s not so much about how much money they have saved, it’s about the confidence that comes from having a carefully crafted retirement plan that helps them find investments that will grow at a steady pace, benefiting when the market goes up without taking a hit when it goes down. Your 50s are not the time to take chances with the money you’ve worked your whole life to earn. You need a plan that pays you more each year so you can live comfortably 10, 20 or even 30 years into retirement.When everyday expenses are covered by a steady income stream, retirees can feel more comfortable spending, traveling and enjoying the lifestyle they worked so hard to achieve.Markets will inevitably rise and fall. But with the right strategy in place, those ups and downs don’t have to determine whether your retirement succeeds or fails.Related ContentA 10-Year Retirement Planning ChecklistSocial Security, Healthcare and Tax: The Potential Complications of Working Past Retirement AgeWe’ve All Heard the Buzz About Roth Conversions, But Not Everyone Will Like the RealityYour 401(k) Is Sitting Pretty Right Now: It Could Be Time to Rethink Your Strategy4 Pro Tips for Successfully Scaling the Medicare MountainThis article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.