Now is the time to understand how the ever changing tax code could be impacting your retirement.

Navigating Tax Code Changes and Retirement Risks with Confidence

In today’s rapidly shifting financial environment, change is the only constant—especially when it comes to tax policy. For individuals preparing for or currently in retirement, understanding how these changes impact your income, savings, and legacy is more important than ever.

At Retire SMART, we believe that now is a critical time to take a proactive approach to financial planning. With major tax legislation scheduled to expire, inflationary adjustments continuing, and further reforms under discussion, 2025 presents a unique window of opportunity—and potential risk—for retirees and pre-retirees.

Key Tax Trends That Affect Your Retirement Strategy

1. Upcoming Expiration of the Tax Cuts and Jobs Act (TCJA)

Many of the individual tax benefits established under the TCJA are set to expire at the end of 2025. This could result in:

• Higher income tax rates
• Smaller standard deductions
• The return of personal exemptions

These changes could impact nearly every American household, especially those with moderate to high retirement income.

2. Secure Act 2.0 and RMD Adjustments

Recent legislation increased the required minimum distribution (RMD) age to 73 (and will eventually move to 75). While this gives retirees more time before tapping into retirement accounts, the RMD rules remain complex, and penalties for mistakes can be severe—up to 25% of the missed withdrawal amount.

3. Inflation-Driven Adjustments

The IRS continues to adjust tax brackets, deductions, and retirement contribution limits in response to inflation. These shifts can create planning opportunities—if you know how to use them to your advantage.

4. Estate and Gift Tax Changes Ahead

The current federal estate tax exemption is historically high but is scheduled to decrease by 50% in 2026 unless Congress intervenes. This provides a narrow window for high-net-worth individuals to take strategic action.

Why You Should Work With a Financial Advisor

Navigating these overlapping changes requires more than general knowledge—it demands strategy, timing, and insight.

At Retire SMART, our team helps clients:

• Optimize Retirement Income: Develop tax-efficient withdrawal strategies across IRAs, 401(k)s, taxable accounts, and Social Security.
• Manage Tax Liability Proactively: Identify Roth conversion opportunities, harvest gains or losses strategically, and stay ahead of shifting tax brackets.
• Protect Your Legacy: Coordinate estate and gifting strategies with attorneys to preserve more of your wealth for your heirs.
• Stay Compliant and Confident: Ensure that you’re meeting IRS requirements while minimizing costly mistakes and surprises.

Added Value of Professional Advice

According to research by Vanguard, working with a financial advisor can potentially add up to 3% in net annual returns through tax optimization, behavioral coaching, and strategic planning.

Case Study: How Retire SMART Delivers Results

Client Profile:
Married couple, ages 65 and 67
$2M in retirement savings, $1M taxable investments
$50,000 annual Social Security income

Challenges:

• Concern about rising tax rates post-2025
• RMD and Medicare surcharge exposure
• Estate planning under current tax exemption

Strategy Implemented:

• Multi-year Roth IRA conversion plan to “fill” lower tax brackets
• IRMAA-focused withdrawal timing
• Gifting strategies to utilize today’s estate tax exemption

Outcome:

• Estimated lifetime tax savings: $150,000
• Increased after-tax inheritance
• Greater financial confidence heading into retirement

The Bottom Line

If you’re within five years of retirement—or already retired—2025 is not the year to wait and see. The combination of tax law changes, inflationary effects, and ongoing legislative debates makes this a crucial time for smart planning.

Working with a firm like Retire SMART can help you stay ahead of changes, protect your financial future, and give you peace of mind.

Now is the time to act.

Let’s Talk

Schedule a complimentary consultation with one of our financial professionals today to discuss how we can help you build a more secure, tax-efficient retirement.

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Disclosures

Retire SMART LLC (“Retire SMART”) is a registered investment advisor. This content is for informational purposes only and should not be construed as personalized financial, investment, legal, or tax advice. Always consult with a qualified professional before making any financial decisions. The information contained herein is derived from sources deemed reliable but cannot be guaranteed.

Past performance does not guarantee future results. Investment advisory services are offered through Retire SMART LLC, a registered investment advisor with the U.S. Securities and Exchange Commission (SEC).

Tax laws are subject to change and vary by jurisdiction. The strategies described may not be suitable for all individuals. Retire SMART does not provide legal or tax advice. Please consult your legal or tax professional for specific guidance regarding your situation.