If you are within roughly ten years of your intended retirement date, the focus begins to shift. This stage is about tightening loose ends, managing risk more deliberately, and ensuring that the decisions you make now support flexibility later.
Late career planning is less about acceleration and more about alignment—between your savings, your expected expenses, and the realities of healthcare and income in retirement.
Catching Up
As retirement approaches, some investors discover they may fall short of their original savings goals. This can happen for many reasons: a late start, periods of lower income, or unexpected life events.
At this point, there are typically two broad levers available:
- Increase savings during the remaining working years
- Adjust expectations for retirement spending and lifestyle
The TSP allows higher contribution limits for participants age 50 and older through catch-up contributions. These additional contributions are designed to help late-career investors boost savings during their final working years.
Because employer matching contributions are tied to regular contributions throughout the year, it’s important to pace contributions carefully. Reaching the annual limit too early can unintentionally reduce the total matching contributions you receive.
If you are considering catch-up contributions, review your payroll elections annually to ensure they are properly set for the year ahead.
Healthcare: FEHB and Medicare
Healthcare planning becomes increasingly important as retirement nears. For federal employees, the Federal Employees Health Benefits (FEHB) Program is a significant advantage.
Eligible retirees may continue FEHB coverage into retirement, with the government continuing to pay a substantial portion of the premium. This continuity is especially valuable for those who retire before becoming eligible for Medicare.
Medicare basics
Most retirees become eligible for Medicare at age 65. Medicare is divided into several parts:
- Part A – Hospital and inpatient services (typically premium-free if eligibility requirements are met)
- Part B – Doctor visits and outpatient services (monthly premium required)
- Part C – Medicare Advantage plans offered by private insurers
- Part D – Prescription drug coverage
Enrollment decisions depend on individual circumstances. Many retirees keep FEHB alongside Medicare, as FEHB can cover services Medicare does not, including emergency care outside the United States.
Because Medicare enrollment windows are time-sensitive, it is important to understand when and how to enroll to avoid penalties or coverage gaps.
Continuing FEHB into retirement
To carry FEHB coverage into retirement, you must be eligible for an immediate retirement and generally must have been enrolled in FEHB for the five years immediately preceding retirement (or from your first opportunity to enroll).
Deferred retirements do not allow FEHB continuation, while postponed retirements may.
Long-term care considerations
Long-term care is often one of the largest potential expenses in retirement. Federal employees who are eligible for FEHB may also be eligible to apply for federal long-term care insurance.
Premiums are generally lower when coverage is obtained earlier, but evaluating options before retirement allows you to assess whether long-term care insurance fits your broader plan.
Investing as Retirement Approaches
As retirement nears, the role of your TSP changes. Instead of focusing solely on growth, your allocation must balance growth, stability, and income sustainability.
Many investors reduce risk during this phase by lowering stock exposure and increasing defensive holdings. Lifecycle (L) Funds do this automatically by shifting toward the G and F Funds as the target date approaches.
However, active investors may take a more tailored approach.
Managing risk intentionally
If your savings are on track, reducing volatility and protecting accumulated gains may take priority. That does not necessarily mean eliminating all stock exposure, but rather sizing it appropriately.
If you are behind on savings, remaining more growth-oriented may improve the durability of your portfolio—but it also requires closer monitoring and discipline.
With retirement income approaching, large drawdowns become harder to recover from. Regularly reviewing allocations and adjusting when conditions change can help manage this risk.
The advantage of staying engaged
Late career is not the time to disengage. Market conditions, interest rates, and participant behavior still matter—perhaps more than ever.
Staying informed allows you to make proactive adjustments rather than reactive ones. The goal is not to eliminate uncertainty, but to approach it with clarity and control.
The choices you make in these final working years shape not just when you retire, but how confident and flexible you feel once you do.
Thomas A Crowley
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