In 2025, the concept of retirement has evolved. It’s not just about accumulating savings and waiting for Social Security. Today’s retirees and pre-retirees face a complex and shifting landscape shaped by:
· Changing laws (like SECURE Act 2.0)
· Market volatility and persistent inflation
· Rising healthcare costs
· Increased longevity
· Evolving tax rules and retirement account strategies
Whether you’re 30 years from retirement or already planning your exit from the workforce, you need more than a generic plan. You need a personalized, tax-savvy, and flexible strategy built for the realities of 2025 and beyond.
At Riley & Company CPA, we specialize in retirement planning that integrates tax efficiency, wealth protection, and lifestyle goals. This comprehensive guide will help you understand the changes, opportunities, and proactive moves you can make to thrive in retirement.
Retirement planning has always required foresight—but today, it demands vigilance.
While inflation has cooled from its 2022 peak, prices remain elevated, and interest rates are significantly higher than the previous decade. This impacts everything from investment returns to home affordability to annuity costs.
· Bond portfolios are more complex — traditional 60/40 stock-bond allocations may no longer provide the same safety.
· Sequence of return risk is more dangerous than ever — early retirement withdrawals during a down market can permanently damage your portfolio.
· Healthcare costs have outpaced inflation — Fidelity estimates the average couple retiring in 2025 will need over $320,000 for healthcare expenses alone.
The SECURE Act 2.0, fully in effect in 2025, dramatically reshapes retirement accounts:
· RMDs now start at age 73 (moving to 75 in future years)
· Catch-up contributions expanded for workers aged 60–63
· Auto-enrollment in employer plans is more common
· Roth matching contributions are now allowed in workplace plans
These changes offer new opportunities for strategic planning, especially around tax brackets and retirement income distribution.
Thanks to medical advances and healthier lifestyles, many retirees today are living 25–35 years past retirement age. This creates new challenges:
· Outliving your savings
· Managing healthcare costs and long-term care
· Balancing conservative investing with growth
We now advise clients to plan for at least 30 years in retirement—even longer for couples in good health.
A secure retirement doesn’t happen automatically. You must create it through thoughtful planning and execution.
For 2025, the IRS has raised contribution limits again:
· 401(k): $23,000 + $7,500 catch-up (if 50 or older)
· Traditional/Roth IRA: $7,500 + $1,000 catch-up
· SEP IRA: $69,000 cap or 25% of compensation
Tax Insight: High earners should consider Backdoor Roth IRAs, while self-employed individuals should evaluate Solo 401(k)s vs. SEP IRAs for maximum flexibility.
Roth IRAs offer tax-free withdrawals, no RMDs, and estate planning advantages. If you’re in a lower tax bracket today than in retirement, it might make sense to convert traditional IRA funds into Roth.
· Ideal Window: The 5–10 years before RMDs begin (typically age 60–72)
· Watch for: Medicare IRMAA brackets, Social Security taxation, and capital gain thresholds
We use tax projection software to model multiple conversion scenarios and find the optimal path for your situation.
Health Savings Accounts (HSAs) offer a triple tax advantage:
1. Contributions are tax-deductible
2. Growth is tax-free
3. Withdrawals for qualified medical expenses are also tax-free
After age 65, you can use HSA funds for any purpose (not just medical), though non-medical withdrawals are taxed like traditional IRAs. This makes HSAs a powerful secondary retirement tool.
Once you retire, the question becomes: How do you spend wisely and minimize taxes?
The sequence in which you draw down your accounts matters. A common strategy:
1. Taxable accounts (savings, brokerage)
2. Tax-deferred (401(k), IRA)
3. Tax-free (Roth)
But this isn’t universal. We customize this strategy based on:
· Tax bracket planning
· Required Minimum Distributions (RMDs)
· Capital gains harvesting
· Charitable giving goals
If you’re 70½ or older, you can donate up to $100,000/year directly from your IRA to a qualified charity. This counts toward your RMD but doesn’t increase your taxable income—a double win.
Even a small increase in Modified AGI can push you into a higher Medicare premium bracket, costing you thousands over time.
We help clients plan withdrawals and conversions carefully to avoid IRMAA “cliffs.”
If you’re a business owner, your exit and retirement are deeply connected. Key strategies include:
1. Establishing the Right Retirement Plan
Options include:
· Solo 401(k) – Ideal for solopreneurs with no employees
· SEP IRA – Simpler option for self-employed with irregular income
· Defined Benefit Plans – For high-income earners over 50 who want to fast-track retirement savings
Each plan comes with pros, cons, and contribution limitations. We help you structure, fund, and maintain these plans for max tax benefit.
2. Planning Your Exit
Succession planning should start 5–10 years before retirement.
Consider:
· Business valuation
· Sale or internal transfer
· Tax treatment of proceeds
· Estate implications for heirs
This is where our integrated CPA and advisory services shine.
Even well-intentioned retirees fall into traps. Here are some we regularly prevent:
Waiting too long to start planning Ignoring inflation in retirement projections Forgetting about long-term care costs Misunderstanding how Social Security is taxed Underestimating RMD tax impacts Failing to update estate plans
We review your entire financial picture to ensure nothing falls through the cracks.
Retirement isn’t a one-size-fits-all equation. That’s why we offer:
Tax-Efficient Withdrawal Planning We help you make the most of every dollar by minimizing lifetime tax liability.
Social Security Optimization Tools Our tools model hundreds of claiming strategies, especially helpful for married couples and surviving spouses.
Investment Coordination with Your Financial Advisor We work alongside your wealth manager to align tax and investment strategies.
Healthcare & Long-Term Care Planning We project future medical costs and plan how to cover them without depleting your savings.
Estate & Legacy Planning From trusts to beneficiary designations, we help protect your legacy and avoid probate pitfalls.
In 2025, the landscape is more complex—but also more full of opportunity—than ever before.
With proactive planning, the right guidance, and tax-aware decision-making, you can:
Enjoy financial peace of mind Avoid unnecessary taxes Build a legacy for your family Live the retirement you envisioned
You don’t need to predict the future. You just need to prepare for it.
With smart cash management, thoughtful tax strategy, and the right advisory partner, you can turn uncertainty into opportunity.
