Turning the calendar from saving to spending is one of the riskiest, most consequential transitions in a retirement plan. When you have multiple taxable and tax-deferred buckets—401(k), traditional IRA, Roth IRA—plus a pension and Social Security to time, a coordinated 12‑month plan reduces surprise taxes, protects Medicare premiums and preserves lifetime income. This guide gives a concrete month-by-month framework, decision checkpoints and examples so you can move with confidence in the year before and after your planned retirement date.

Why a 12-month plan matters

The final 12 months before you stop working are when timing choices have the biggest impact. You must coordinate:

  • 401(k) and IRA rollovers or distributions (and the tax consequences)
  • When to begin a defined‑benefit pension or choose a survivor option
  • When to claim Social Security benefits relative to your Full Retirement Age (FRA)
  • How to shape taxable income so it doesn’t spike Medicare Part B/D premiums (IRMAA) or push you into higher tax brackets
  • Preparing for required minimum distributions (RMDs) — current RMD owner age is 73 (through 2032 for most taxpayers)

Quick primer: some rules you’ll reference

  • RMDs apply to traditional IRAs and 401(k)s; Roth IRAs (owner) are not subject to RMDs. Roth 401(k)s are subject to RMDs unless rolled to a Roth IRA first.
  • RMD age for most owners is 73 in 2026; it rises to 75 for those who reach age 73 after 2032 per law.
  • Medicare Part B and D premiums use modified adjusted gross income (MAGI) from two years earlier to determine IRMAA surcharges.
  • Pensions typically require an election for single vs joint-and-survivor benefits; the election changes the size of the monthly check and survivor protection.
  • Social Security benefits grow by delayed credits if you wait past FRA up to age 70; claiming early reduces the monthly amount permanently.

Overview: 12-month roadmap

Below is a practical timeline organized by quarters. "T" is your intended retirement date (the month you leave employment and stop paychecks). Adjust the schedule if you retire mid-year or have complex employer benefits.

T minus 12 to T minus 9 months — Inventory & modeling

  • Gather statements: recent 401(k) plan summary (fees, in‑plan annuity options, distribution forms), IRA and Roth IRA account statements, pension estimate letter, Social Security statement, recent tax returns.
  • Run a cash‑flow model for the first 5 years in retirement showing income sources and withdrawals. Use one model with Social Security claimed at FRA and another with delayed claiming (e.g., age 70).
  • Project taxable income for the year of retirement and the two subsequent years (for Medicare IRMAA and tax planning).
  • Check beneficiary designations on 401(k), IRA and pension forms; update if life events occurred.

T minus 9 to T minus 6 months — Health and employer logistics

  • Confirm retirement procedures with HR: last paycheck date, final FSA or HSA contributions, COBRA options, and whether you can delay RMDs if you plan to remain on payroll past RMD age (some 401(k) plans allow delay for non‑5% owners).
  • Review employer‑sponsored retiree health or Medicare buy‑in offers; evaluate whether you need COBRA until Medicare effective date (typically start Medicare at 65).
  • If you have a defined benefit pension, request formal payout options and survivor annuity cost tables for each election.

T minus 6 to T minus 3 months — Tax and withdrawal sequencing

This is the period to firm up taxable‑income sequencing for the retirement year and the next two years (important for IRMAA and RMD impact).

  • Decide whether to roll your 401(k) to an IRA. Pros: more distribution flexibility, Roth conversion options, consolidated recordkeeping. Cons: losing certain creditor protections and possible in‑plan options like annuities or loans. If you plan to keep a balance in the employer 401(k) past age 73 and are still working, leaving money in the 401(k) may allow RMD deferral until actual retirement (confirm with plan).
  • Create a tentative withdrawal ordering plan for the first 3 years: taxable accounts → tax‑deferred (401k/IRA) → Roth IRA, unless tax projections recommend conversions or different sequencing.
  • Estimate one‑time events: partial Roth conversions, large taxable brokerage sales, or QCDs (qualified charitable distributions) if you are 70½+ and intend to satisfy charitable goals and lower taxable income.

T minus 3 to T minus 1 month — Pension election & Social Security timing

  • Finalize pension election. If you elect a joint survivor option, calculate how that reduces your initial payment and how that affects spouse cash needs. Request exact numbers in writing and confirm the effective start date.
  • Decide Social Security claiming: coordinate with your pension. Some pension plans offset Social Security (rare) but often they don’t. Compare lifetime income projections with claiming at FRA vs deferring to 70. Consider the household’s longevity, health, and liquidity needs.
  • If you plan to delay Social Security past FRA for larger checks, ensure your retirement cash flows cover the interim years.

T minus 1 month to T plus 3 months — Execution & first distributions

  • File retirement paperwork with HR, set up final payroll, elect health coverage or Medicare enrollment, and finalize pension start forms.
  • If you elect a lump-sum pension (if offered), evaluate using an independent pension buyout calculator or get a second opinion from a fiduciary financial planner. Lump sums have different tax consequences than annuity payments.
  • Set up recurring distributions from 401(k) or IRA if you will use them for paycheck replacement. Ensure withholding elections are set to avoid tax underpayment penalties.

T plus 3 to T plus 12 months — Stabilize & tax coordination

  • Monitor actual income vs. projections; adjust distributions to avoid surprises that could trigger an IRMAA increase two years down the line.
  • If you deferred Social Security, revisit the decision if health or preferences change. If you delayed and begin receiving, update income projections and consider tax withholding on benefit taxes.
  • Prepare for RMDs if you will hit age 73 within the next several years. Even if RMDs aren't immediately due, documenting beneficiary designations and considering Roth rollovers now can reduce future RMDs for heirs.

Example: one concrete scenario

Mary, age 66, plans to retire at 67 (FRA 67). She has:

  • 401(k): $800,000 (employer plan)
  • Traditional IRA: $200,000
  • Roth IRA: $40,000
  • Pension: $24,000/year deferred to elect at 67
  • Estimated Social Security at FRA: $2,400/month

Key choices: Mary wants income stability without triggering IRMAA surcharges and would like to avoid a large tax spike at 73. Using the 12-month roadmap she:

  1. Models cash flows across claiming ages for Social Security and elects pension single-life now with option to name a lump-sum survivor (based on cost tables) because her spouse has separate retirement income.
  2. Decides to roll the 401(k) to an IRA after checking creditor protection and annuity options; this gives her more withdrawal mechanics and the ability to schedule small IRA withdrawals in years she expects high taxable income (e.g., year she delays Social Security).
  3. Chooses to postpone Roth conversions because converting now would raise MAGI and could increase IRMAA for Medicare premiums; instead she plans modest conversions earlier in the retirement decade when taxable income dips.

Tax and Medicare pitfalls to avoid

  • Triggering IRMAA with a one-time large conversion or brokerage sale in the tax year two years before an increase in Medicare premiums. Always model IRMAA impact using two-year lookback.
  • Forgetting that Roth 401(k) balances still require RMDs if left in the plan. Roll Roth 401(k) to a Roth IRA pre‑RMD to avoid future RMDs if that’s your goal.
  • Missing beneficiary reviews on old 401(k)s or pensions—retirement can change estate plans and beneficiaries.
  • Failing to confirm whether your 401(k) plan allows in‑plan annuities or continuing RMD deferral while still working past age 73 if you plan to work part-time.

Checklist: must-do items in your final year

  • Get written pension payout options and timeframe.
  • Confirm last paycheck, final FSA/HSA elections and COBRA start date.
  • Run three-year tax and IRMAA projection scenarios (retirement year and two years after).
  • Decide 401(k) rollover versus in‑plan leave and document the decision.
  • Set up initial withdrawal plan (timing and withholding).
  • Double-check beneficiary designations and update if needed.
  • Schedule a meeting with a fee-only fiduciary planner or tax advisor if you face complex choices (e.g., lump-sum pension, large conversions).

When to get professional help

If you face any of these situations, consult a fiduciary advisor or tax pro before executing irrevocable choices:

  • Your pension offers a large lump-sum choice and you’re unsure about annuity vs lump-sum tradeoffs
  • You’re considering large Roth conversions in the retirement year
  • Your income projections show potential IRMAA surcharges or four-figure spikes in Medicare premiums
  • You have multiple tiers of employer benefits, nonqualified deferred compensation, or complex inherited accounts

Final thoughts

A coordinated 12‑month plan reduces regret and keeps taxes, Medicare premiums and lifetime income aligned with your goals. Start early, run multiple scenarios, and lock in the few irreversible elections (pension choices, Social Security claiming) only after modeling how they interact with your 401(k), IRA and Roth IRA balances. The math can be simple—cover essentials with the checklist—or complex enough to warrant professional help. Either way, treat the year before and after your retirement date as a project with deadlines and written decisions.