Budgeting App for People Approaching Retirement: What to Track

For people approaching retirement, the 24 months before someone files for Medicare are when a household budget changes more than at almost any other point in life — and most budgeting tools don't carry the categories that drive those changes. The 2026 standard Medicare Part B premium is $202.90 per person per month before any income surcharge,^[] and that surcharge — IRMAA — is decided by the tax return filed two calendar years earlier. A pre-retirement budget that ignores this lookback is making decisions in the wrong year.

For people approaching retirement, the question "is a budgeting app worth it?" is really a question about whether your app's category list still matches reality. If it doesn't, every tracked dollar tells the wrong story.

Pre-retiree spending doesn't look like a working budget

In the 2024 BLS Consumer Expenditure Survey, healthcare made up 7.9% of the average household's annual outlay,^[] and the share rises sharply for households over 65 as employer coverage rolls off. Two categories quietly take over the budget in the five-year window before retirement: healthcare premiums and tax planning. Both are lumpy. Neither fits a "monthly average" line.

This matters because most budgeting apps were designed around a working couple's W-2 cycle: predictable income, fixed payroll deductions, and a relatively stable category mix. The pre-retirement budget breaks all three of those assumptions in sequence — first as one spouse winds down hours, then as employer health coverage ends, then as the first 401(k) distribution or Social Security check lands.

The categories pre-retirees should track that no app preconfigures

A budgeting app worth keeping into retirement should let you add at least four envelope-style categories that aren't in the default templates:

1. IRMAA buffer — a reserve tracked against the 2024 MAGI lookback, since 2026 Medicare premiums are based on what was filed two years earlier. The 2026 Tier 1 thresholds are $109,000 single and $218,000 joint;^[] a couple over by $1 pays an extra $1,948.80 in surcharges in their first Medicare year. The original calculation rendered below shows the buffer math for a $145,000-AGI couple.
2. Healthcare-bridge envelope — for couples retiring before 65, a sinking fund covering the gap to Medicare. The 2026 national average lowest-cost bronze ACA plan is $11,625/year unsubsidized;^[] for a 62-year-old, the actual premium typically runs ~2× that under the ACA's age-rating curve. A 36-month bridge for two people is a meaningful balance-sheet line. If you want to track it as a separate goal, MFFT's sinking funds for the healthcare-premium gap before Medicare page walks through the structure.
3. Roth catch-up line — starting January 1, 2026, employees who earned more than $150,000 in FICA wages the prior year must make their age-50+ or age 60–63 catch-up contributions as Roth (after-tax) rather than traditional pre-tax.^[] The same dollar deferral now reduces take-home pay where it previously reduced taxable income. The category needs to move from the "tax-deferred" envelope to the "post-tax savings" envelope, and the difference is real cash flow.
4. RMD pre-funding — a line item that holds the cash to pay required-minimum-distribution-driven taxes in the year RMDs begin (currently age 73), so the budget isn't disrupted by a once-a-year withdrawal spike.

How envelope budgeting handles a lumpy fixed-income year

The MFFT model — category envelopes plus reserves for known lumpy expenses — was originally designed for irregular freelance income. It carries cleanly into pre-retirement, where the same lumpy-event problem reappears for different reasons: an annual property tax bill, a Medicare Part B premium that adjusts each January, an IRMAA appeal window, a Roth conversion executed in December.

The 2026 401(k) elective deferral limit is $24,500, with an age-50+ catch-up of $8,000 and a SECURE 2.0 super-catch-up of $11,250 for ages 60 to 63 — totaling up to $35,750 for a worker in that age window.^[] A pre-retiree maxing the super-catch-up needs that pulled out of the budget envelope before any other discretionary line is funded, or the math doesn't work. Treating it as a "fixed expense" (alongside rent and insurance) is the simplest fix.

The IRMAA buffer is the category most pre-retirees underrate. A working budget sees a $50,000 Roth conversion as a tax-bracket question; a pre-retirement budget needs to see it as a Medicare-premium question first, because the cliff is steeper.^[]

What I'd actually track 12 months before my retirement date

A pre-retirement-grade budget doesn't need more line items — it needs a different five. With one year to go, these are the metrics worth a monthly check-in: estimated current-year MAGI versus the next IRMAA bracket, healthcare-bridge balance versus the months of bridge needed, super-catch-up YTD versus the $11,250 cap, RMD pre-funding balance, and a 12-month reserve for the property tax and insurance bills that no longer share a working paycheck. The point isn't that any single number will surprise you. The point is that the same dashboard that worked for the last 25 years stops being a dashboard the moment one of those five numbers is wrong by 10%.

A small honest caveat: this advice is least useful when household MAGI is well below $218,000 (joint) and likely to stay there. For those households the IRMAA category is informational rather than actionable, and the healthcare bridge envelope still matters but the IRMAA buffer doesn't. The framework still applies — the categories list is just shorter.

Most retirement-readiness content focuses on whether you've saved enough. By the 12-month mark, that question is mostly answered. The real budget question is whether the categories you're tracking will still be the right ones on the day you stop getting paid — and for almost everyone in this window, the answer requires four or five new envelopes that the default app preset doesn't think to suggest. A budgeting app for people approaching retirement is worth it precisely when it lets you build that custom envelope set without fighting the tool.