What should I do in my first year of retirement?

Track real spending for 12 months. First-year budgets are guesses. Travel, home projects and health costs can run higher early on. Compare each month's actual spending to your plan and adjust withdrawals from real numbers.

Confirm health coverage. If you are turning 65, your Medicare Initial Enrollment Period is 7 months: it starts 3 months before the month you turn 65 and ends 3 months after. Coverage always starts on the first of a month. In 2026 the standard Part B premium is $202.90 a month and the Part B deductible is $283. If you are under 65, confirm the date your employer coverage ends and what replaces it the next day.

Set a tax plan for withdrawals. No paycheck means no automatic withholding. You can have tax withheld from pensions and account withdrawals or pay estimated tax. The IRS generally does not charge an underpayment penalty if you owe less than $1,000 after withholding, or if you paid at least 90% of this year's tax or 100% of last year's, whichever is smaller (higher earners face a stricter rule).

Watch for a Medicare surcharge. Part B premiums above the standard amount are based on your tax return from two years earlier, so 2026 premiums use 2024 income. If your final working year was high, you can ask Social Security to use your lower income after a work stoppage by reporting a life-changing event on Form SSA-44.

Test the routine before big moves. Many people plan to sell a house, relocate or start a business in year one. A year of real data on spending, health and how you use your time makes those choices cheaper to get right.