# What should I do in my first year of retirement?

Canonical: https://theretirementdecisionlab.com/answers/what-should-i-do-in-my-first-year-of-retirement/
Section: What will your retirement look like? (Retirement Decision Lab, Decision 4 · Week 4 · Wed Dec 2)
Facts checked: 2026-10-06 · Next review by: 2027-01-15
Reviewed by: Todd Allyn, Founding Director, Sovereo Intelligence Research

## Short answer

Track what you actually spend, confirm health coverage has no gap, set up withholding or estimated tax payments on your new income, lock in your Medicare dates, and test whether your daily routine works before making big changes like a move.

## Detail

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.

## Where it gets personal

In Week 4 you build a dated first-year checklist from your own Medicare, tax and coverage dates. The Retirement Decision Lab: https://theretirementdecisionlab.com/

## Sources

1. When does Medicare coverage start?, Medicare.gov: https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
2. 2026 Medicare Parts A & B Premiums and Deductibles, Centers for Medicare & Medicaid Services: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
3. Premiums: Rules for Higher-Income Beneficiaries, Social Security Administration: https://www.ssa.gov/benefits/medicare/medicare-premiums.html
4. Topic no. 306, Penalty for underpayment of estimated tax, Internal Revenue Service: https://www.irs.gov/taxtopics/tc306

Education only. Not financial, tax, investment, immigration or legal advice.
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