2025 Retirement Planning: 7 Smart Purchases to Make Before You Stop Working
By Michael Ruger, CFP®
Partner and Chief Investment Officer at Greenbush Financial Group
Most retirees spend decades saving and investing, only to face one of the hardest transitions at the finish line: shifting from saver to spender. At Greenbush Financial Group, we often hear clients say they wish they had spent more strategically before retiring—not less. By making key purchases while you still have earned income, you can reduce stress, avoid costly surprises, and give yourself permission to fully enjoy retirement.
This article covers seven smart spending decisions to consider before leaving the workforce, along with the tax and planning angles that can make them even more effective.
Medical and Dental Work Before Medicare
Healthcare costs can spike in retirement, and Medicare doesn’t cover everything—especially dental, vision, and hearing. It’s often wise to complete major procedures while you’re still working.
Max out your Health Savings Account (HSA) during your last high-income years. HSAs offer triple tax benefits—deductible contributions, tax-deferred growth, and tax-free withdrawals for qualified expenses.
If modifications such as no-threshold showers or grab bars are medically necessary, some may qualify as itemized deductions. Proper documentation is essential.
Map out coverage if you retire before age 65. Compare COBRA, ACA marketplace options, and potential premium tax credits.
Secure Your Next Home While Still Employed
Qualifying for a mortgage is often easier with W-2 income than retirement income. Buying or refinancing before you retire can lock in more favorable terms.
Downsizing? Remember the §121 home sale exclusion allows couples filing jointly to exclude up to $500,000 of capital gain on the sale of a primary residence ($250,000 if single).
Considering upgrades? Look into energy-efficiency credits under the Inflation Reduction Act. For example, the Energy Efficient Home Improvement Credit (25C) can provide annual tax credits for qualifying improvements.
Complete Major Home Repairs and Aging-in-Place Upgrades
Addressing big-ticket items before retirement reduces future cash flow stress. Common examples include:
Roof, HVAC system, windows, and insulation
Whole-home surge protection or backup power systems
No-threshold showers, wider doorways, higher-seat toilets
Tackling these projects upfront means fewer disruptions—and potentially fewer withdrawals during a market downturn.
Buy a Reliable, Paid-Off Vehicle
Transportation is a non-negotiable retirement expense. Purchasing a reliable, low-maintenance car before retiring allows you to enter retirement debt-free.
Evaluate new vs. certified pre-owned (CPO) for warranty protection.
For those considering EVs or hybrids, federal and state incentives can significantly reduce net cost.
Budget for a replacement cadence of 7–10 years to spread costs evenly across retirement.
Prepay for Bucket-List Travel
The early years of retirement are often called the “go-go years.” Booking major trips while you’re healthy—and locking in refundable deposits or travel insurance—helps ensure you actually take them.
Build a “first 1,000 days of retirement” calendar to schedule must-do experiences.
Consider paying now while your income supports larger expenses. This reduces pressure on retirement withdrawals later.
Use High-Income Years to Fund Future Spending
Your final working years often come with peak income. This creates opportunities to front-load retirement readiness:
Roth conversions up to the top of your target bracket before Medicare enrollment can reduce future taxable income.
Watch for IRMAA (income-related monthly adjustment amounts) at ages 63–65, which can increase Medicare premiums if income is too high.
Consider donor-advised fund (DAF) contributions to pre-fund charitable giving while reducing taxable income.
Don’t Forget Estate and Administrative Prep
Beyond purchases, pre-retirees benefit from a final sweep of administrative tasks:
Separate credit cards for spouses to maintain access to credit.
Pre-need funeral planning or irrevocable funeral trusts to relieve future burdens.
Refresh wills, POA, health care proxies, and beneficiary designations.
Audit recurring subscriptions, timeshares, and other lifestyle costs.
Key Takeaway
Retirement is about more than accumulating assets—it’s about spending them wisely. By completing health care, housing, car, and travel purchases while still earning, you free up your retirement income for flexibility and enjoyment. At Greenbush Financial Group, we help clients not only save smart but also spend smart.
About Michael……...
Hi, I’m Michael Ruger. I’m the managing partner of Greenbush Financial Group and the creator of the nationally recognized Money Smart Board blog . I created the blog because there are a lot of events in life that require important financial decisions. The goal is to help our readers avoid big financial missteps, discover financial solutions that they were not aware of, and to optimize their financial future.
Frequently Asked Questions (FAQs)
What major expenses should I plan to cover before retiring?
Common pre-retirement purchases include completing medical or dental procedures, making home repairs or accessibility upgrades, and replacing your vehicle. Addressing these while you still have earned income helps reduce financial stress once you retire and may provide additional tax benefits.
Why should I complete medical and dental work before enrolling in Medicare?
Medicare generally doesn’t cover dental, vision, or hearing care. Completing major procedures before retirement—while you still have employer coverage—can save money and simplify your transition. It’s also smart to fully fund your Health Savings Account (HSA) in your final working years for future tax-free healthcare spending.
Is it better to buy or refinance a home before retiring?
Yes, qualifying for a mortgage is typically easier when you have active W-2 income. Buying, refinancing, or downsizing before retirement can secure better terms. Couples selling their primary residence may also exclude up to $500,000 in capital gains, and certain energy-efficient home upgrades may qualify for tax credits.
Why should I replace my car before retirement?
Buying a dependable, low-maintenance car before you retire allows you to enter retirement debt-free and avoid large future withdrawals.
How can I use my final high-income years to improve my retirement outlook?
Peak earning years are ideal for strategic financial moves like Roth conversions, funding a donor-advised fund (DAF), or prepaying for future travel. These steps can help lower future taxable income, manage Medicare premiums, and enhance your flexibility in retirement.
What estate and administrative steps should I complete before retiring?
Review and update your will, powers of attorney, and beneficiary designations. Consider establishing separate credit accounts for each spouse, planning funeral arrangements in advance, and canceling unnecessary subscriptions or timeshares to streamline post-retirement finances.
How do pre-retirement purchases support a more enjoyable retirement?
Spending strategically before you stop working lets you handle big expenses with current income, freeing future cash flow for experiences and lifestyle choices. At Greenbush Financial Group, we encourage clients to view retirement not just as saving wisely—but spending wisely, too.
