Most people spend 40 or more years in the workforce before retiring, and even then, it’s not always easy to save what you need. Americans today estimate they’ll need $1.46 million to retire comfortably, according to a Northwestern Mutual survey. While expectations don’t always align with reality, many people will probably need around this much or more to cover all their expenses.

Retirement planning usually takes place over decades, leaving plenty of time for your goals to change, too. Checking in with yourself throughout the planning process can keep you on track, but you also need to give your finances a hard look just before leaving the workforce.

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If you’re planning your retirement party for 2025, take some time to review the following five things to ensure you won’t be caught off guard by the financial transition.

1. Decide when to claim Social Security if you haven’t already

Social Security checks are a critical source of retirement income for many seniors, so you need to be strategic about when you claim them. Everyone who’s worked long enough to earn 40 credits — where one credit equals $1,730 in earnings and you can earn a maximum of four credits per year — can apply for Social Security as early as 62.

You must wait until your full retirement age (FRA) to claim the full benefit you’ve earned based on your work history, though. FRA is based on birth year and you can find yours in the table below:

Data source: Social Security Administration.

Claiming under your FRA reduces your checks. You lose:

• 5/9 of 1% per month for up to 36 months of early claiming
• 5/12 of 1% per month for every additional month of early claiming beyond 36 months

That results in a decrease of 25% for 62-year-old claimers with FRAs of 66 and 30% for those with FRAs of 67. This decrease is typically permanent, though those who work and claim benefits at the same time may see their checks rise at their FRA.

You can also delay Social Security beyond your FRA and your checks will grow by 2/3 of 1% per month. This ends when you qualify for your maximum benefit at 70.

Despite the advantages of delaying benefits, it’s not always your best move. Those with serious health issues and those who cannot afford to cover their living expenses without Social Security benefit from early claiming.

You must make the right call for yourself based on your own life expectancy and financial situation. Married couples also have to consider how their claiming age may affect their partner’s ability to claim spousal benefits. If you’ve already chosen a claiming age, review it now to make sure you’re still comfortable with it.

If you haven’t done so yet, create a my Social Security account and use the Benefit Estimator tool to get a rough idea of your Social Security checks at every claiming age between 62 and 70. Multiply possible claiming ages by the number of months you expect to receive benefits to estimate your lifetime benefit. For example, a $2,000 monthly benefit claimed for 20 years — 240 months — gives you a lifetime benefit of $480,000. Choose the age that gives you the highest lifetime benefit unless health or financial conditions prohibit this.

Once you know how much your monthly Social Security benefits will be, you can determine how much of your expenses you’ll need to cover from other sources.

2. Determine whether you have adequate savings

You may have had a retirement savings goal in mind for a while, but it might not be adequate for your needs any longer. You may have discovered in the previous step that your Social Security checks won’t go as far as expected. Or you might learn that the cost of living has risen faster than expected in the area you plan to retire in.

Changes like these require you to recalculate how much you need to save for retirement. It’s important to do this before retiring. Otherwise, you run the risk of outliving your savings.

If you realize you don’t have enough savings, you may need to remain in the workforce a little longer. Or you might need to rethink how much you plan to spend annually.

3. Decide on a withdrawal strategy

Knowing how much you can safely withdraw from your retirement accounts annually helps you avoid outliving your savings. Everyone’s approach to this is different.

Some people prefer to follow the 4% rule. This involves withdrawing 4% of your retirement savings in the first year of retirement and adjusting this amount for inflation every year thereafter. It’s supposed to help your savings last 30 years, but this isn’t always the case. It’s also not the most flexible option.

Those who plan for higher expenses in the early years of retirement — perhaps to travel or make big-ticket purchases — might find it makes more sense to come up with a custom withdrawal strategy that accounts for these plans.

4. Schedule check-ins

Retirement is a big transition, and there are bound to be some bumps in the road. It’s especially important to review your finances periodically throughout retirement, especially in the first year or two, to see how your expected expenses align with your actual ones.

You should do this at least once or twice per year. You can also check in more frequently if you’d like. Schedule these dates on your calendar so you don’t forget.

5. Have a backup plan

If all isn’t well at your check-ins, you need a plan to get things back on track. This could involve decreasing spending or delaying certain purchases. In some cases, it may call for more extreme measures, like returning to work for a little while.

Think about what you’re willing to do if you’re spending your savings faster than expected and be prepared to act quickly if necessary. The earlier you catch these problems, the easier they are to remedy.

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