5 Retirement Issues the Upper Class Will Face in 2025
Written by
Laura Beck
Edited by
Zuri Anderson
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Money may solve a lot of problems, but 2025 is bringing some unique challenges for wealthy retirees.
Here are five retirement issues among the upper middle class will likely face in 2025, according to financial and retirement experts.
The Tax Bulls-Eye
Let’s be blunt: the wealthy are walking around with a target on their backs.
“I think it’s easier to target the upper class with tax policy and legislative policy,” noted Stewart Willis, president of Asset Preservation Wealth & Tax. “You need to have a plan when it comes to an ever changing and uncertain environment.”
The Required Distribution Mess
Having a fat retirement account sounds great until Uncle Sam comes knocking.
Dr. Barbara O’Neill, certified financial planner (CFP) and expert with RetireGuide, points out that wealthy retirees “often face challenges with spending down savings, managing income taxes on investments, and required minimum distributions.”
This is particularly thorny “if the bulk of their wealth is in tax-deferred accounts that are subject to [required minimum distributions, or] RMDs,” she added.
The Medicare Surprise
Think Medicare is straightforward? Not if you’ve got money.
O’Neill warned that upper-class retirees often get slapped with “the Medicare surcharge for high-income taxpayers called [Income-Related Monthly Adjustment Amount, or] IRMAA.”
In other words, making too much means paying more for the same coverage others get.
The Tax Law Time Bomb
Here’s what’s keeping financial planners awake: “It is unclear if the Tax Cuts and Jobs Act will sunset after [Dec. 31, 2025] and what future income tax brackets will be,” O’Neill noted.
Plus, those multiple streams of retirement income? They could trigger the net investment income tax.
The Lifestyle Reality Check
Even the rich aren’t immune to money troubles. O’Neill said she sees many wealthy folks fall into “lifestyle creep as they strive to maintain a high-cost lifestyle. This can make it difficult to save for expenses in later life.”
Bottom line? Being wealthy doesn’t mean being worry-free in retirement. But at least now you know what’s coming.
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