What Every Executive Should Do Before Retiring

August 5, 2025

Retirement is more than the end of a career—it’s the beginning of a new, purpose-driven chapter. For executives, the complexity of compensation, benefits, and wealth planning means that a thoughtful, comprehensive strategy is critical to ensure a smooth transition and lasting security. Here is an outline of steps every executive should take in the years leading up to retirement. 

1. Define Your Vision—and Test It Early 

Before you retire, get specific about what you want retirement to look like. Where will you live? How do you want to spend your time? Will you continue to work in some capacity, serve on boards, travel extensively, or engage in philanthropy? 

Steps You Can Take: 

• Draft a lifestyle plan: Include location, travel, family support, and leisure goals. 

• Estimate lifestyle costs: Use your vision to create a realistic expense forecast. 

• Model scenarios with your advisor: Test if your current assets align with your retirement vision. 

Why it matters: Having clarity about your goals allows your financial, legal, and tax advisors to align your strategy with your lifestyle needs—well before your retirement date. 

2. Run a Realistic Cash Flow Analysis 

Even high-income earners can misjudge how much they’ll spend in retirement. Many assume expenses will drop, but that’s not always the case—especially if you plan to travel, pursue hobbies, or support children or grandchildren. 

Steps You Can Take: 

• Work with your advisor to model cash flow needs: Account for healthcare, insurance¹, travel, taxes, and inflation. 

• Include long-term care scenarios: Factor in potential health events that may require outside care or support. 

• Plan for variable spending: Expect higher spending early in retirement and potentially rising healthcare costs later. 

Why it matters: A detailed, realistic plan reduces the risk of shortfalls—and allows you to adjust course if needed before leaving the workforce. 

3. Review and Optimize Deferred Compensation Plans 

Executives often accumulate significant wealth through deferred compensation plans. But when and how you receive those payouts can dramatically affect your tax burden and liquidity. 

Steps You Can Take: 

• Review your payout elections: Check if your existing distribution plan aligns with your updated retirement strategy. 

• Explore tax-efficient timing: Consider spreading distributions over several years, especially if moving to a lower-tax state. 

• Coordinate with your tax advisor: Make sure payouts don’t unintentionally push you into a higher tax bracket. 

Why it matters: Properly timing your deferred compensation can reduce your lifetime tax liability and ensure better control over cash flow. 

4. Diversify Concentrated Stock Positions 

Many executives hold large portions of company stock, often tied to long-term incentives or loyalty. While this may have helped build wealth, it introduces significant risk in retirement. 

Steps You Can Take: 

• Gradually reduce concentration: Begin selling shares over time, especially while still earning income. 

• Work with your advisor on tax strategy: Balance the timing of sales with tax efficiency and capital gains planning. 

• Rebalance your portfolio: Align your investments¹ with your goals, risk tolerance, and expected income needs. 

Why it matters: Diversifying before retirement helps protect your portfolio from market volatility and reduces reliance on a single company’s performance. 

5. Maximize Retirement Income Sources 

Understanding the range of income sources available to you—and how to tap them strategically—is key to building a sustainable retirement plan. 

Steps You Can Take: 

• Review all retirement accounts: IRAs, 401(k)s, Roth accounts, pensions, and taxable investments¹. 

• Understand your pension options: Decide between lump sum, joint-and-survivor, or fixed-period benefits. 

• Plan Roth conversions strategically: Convert during low-income years or before RMDs begin to reduce future taxes. 

Why it matters: A coordinated drawdown strategy helps preserve assets and reduces your tax burden throughout retirement. 

6. Build a Flexible and Intentional Legacy Plan 

If you find your assets exceed what’s needed for your lifestyle, legacy and philanthropic planning can become a powerful part of your retirement strategy. 

Steps You Can Take: 

• Clarify your goals: Decide how much you want to pass to heirs, donate to charity, or allocate to future generations. 

• Use current tax exemptions: Leverage the high gift and estate tax exemptions before they sunset in 2026. 

• Establish or update trusts¹: Protect assets, control distributions, and reduce estate tax exposure. 

Why it matters: Legacy planning ensures your wealth reflects your values—and gives you the opportunity to influence the next generation. 

7. Expect Change—and Stay Flexible 

No retirement plan can predict the future with certainty. Market downturns, health issues, or changes in tax law may require you to adjust your strategy. 

Steps You Can Take: 

• Review your plan annually: Revisit assumptions, expenses, and investment¹ performance with your advisory team. 

• Maintain liquidity: Keep enough accessible assets to handle unexpected expenses without disrupting your long-term plan. 

• Stay informed: Work with a team that proactively monitors changes in law, tax code, and market dynamics. 

Why it matters: Flexibility is key to resilience—and helps ensure your plan can adapt as life evolves. 

Closing Thoughts 

Retirement planning for executives goes beyond building a nest egg—it requires nuanced coordination between financial, legal, and tax strategies to support the life you want after work. By starting early, stress-testing your assumptions, and collaborating with experienced advisors, you can retire with greater clarity, control, and confidence. 

Disclaimer: Private banking services offered through First Western Trust Bank, Member FDIC 

1. Retirement, Investment, and Insurance products and services are Not FDIC Insured, Not guaranteed by the Bank, May Lose Value 

This content is for informational purposes only and does not constitute legal or tax advice. Please consult your legal or tax advisor for specific guidance tailored to your situation. First Western Trust Bank cannot provide tax advice. Please consult your tax advisor for guidance on how the information contained within may apply to your specific situation.