Retirement Planning
Retirement is no longer a simple shift from work to leisure—it’s a financial journey that can span decades. The SECURE Act 2.0, passed in 2022, introduced major changes that impact how you save, spend, and manage money. Understanding these rules—and how they fit into your plan—can mean the difference between more confidence and uncertainty.
Why Planning Matters
Only 36% of Americans have a written retirement plan .1Without one, you can risk running out of money, paying unnecessary taxes, or making emotional decisions during market downturns. A plan can help answer:
- How much income you’ll have each year.
- Where it will come from.
- How to manage taxes, healthcare, and inflation.
Think of your plan as a GPS for your financial future—itguides you through market volatility, rising costs, and unexpected expenses. Without it, you may be driving blind.
How Americans Stack Up2
- Median savings by age:
- Under 35: $18,800
- 35–44: $45,000
- 45–54: $115,000
- 55–64: $185,000
- 65–74: $200,000
- 75+: $130,000
- Mean savings by age:
- 35–44: $141,520
- 55–64: $537,560
- 65–74: $609,230
Over half of American households either have no dedicated retirement savings or fall far short of benchmarks, highlighting the need for early and consistent planning.3
Key SECURE Act 2.0 Changes
- RMD Age: Increased to 73 in 2023 for individual turning 72 after 2022; will rise to 75 by 2033.
- Roth Options: Employers can offer Roth matches; unused 529 funds can roll into a Roth IRA (up to $35,000 lifetime).
- Emergency Withdrawals: $1,000/year (or less if the account balance is low), with a 3-year window to repay the distribution,
- Catch-Up Provisions:
- High earners (50+, prior-year wages $145,000+): catch-up contributions must be Roth, effective 2026.
- Ages 60–63: allowed to contribute the greater of $10,000 or 150% of standard catch-up limits in 401(k), 403(b), and 457(b) plans (starting 2025).
These provisions allow strategic tax planning and savings—but require awareness and intention to implement.
The New Retirement Reality
Pensions are rare—most retirees rely on personal savings. That means:
- You manage your money for life.
- Market volatility, inflation, and healthcare costs can derail plans.
- Longevity risk is real: A healthy couple at 65 has a 50% chance one spouse lives past 90.4
Biggest Risks
1. Longevity: Your money must last longer.
2. Inflation: For example, over a 30 year period, $50,000in 1995 equals $105,412.49 in 2025.5
3. Healthcare: A 65-year-old couple that retired in2023 can expect to spend $315,000 on healthcare expenses through retirement.6
Strategies to Make Money Last
Sequence-of-Returns Risk: Early poor returns plus withdrawals can reduce your portfolio.
How to help manage:
- Keep 1–2 years of expenses in cash.
- Use a bucket strategy.
- Consider annuities for guaranteed income.
Bucket Strategy:
- Short-Term (0–2 yrs): Cash for immediate needs.
- Intermediate (3–10 yrs): Bonds for stability.
- Long-Term (10+ yrs): Stocks for growth.
Income Floor: Cover essentials with Social Security,pensions, or annuities.
Dynamic Withdrawals: Increase spending in good years, pullback in downturns to help preserve assets.
Social Security Timing7:
- Claim at 62: Reduced benefits (~30%).
- Full Retirement Age (66–67): Full benefit. Wait until 70: Benefit grows ~8% per year after FRA.
Tax Planning Opportunities
Delaying RMDs can help with Roth conversions, potentially reducing future taxable income. Prioritizing withdrawals from taxable accounts can help manage tax brackets and Medicare premiums.
Bottom-line
With SECURE Act 2.0changes, evolving risks, and new opportunities, now is the time for a written, proactive retirement strategy.Ready to learn more? Get started by
requesting a complimentary initial consultation whenever it’s convenient for you.
Read more articles by Connell Lee