People are retiring differently today than in the past – just think, will you retire exactly like your parents did? Probably not. Retirement is no longer about the end of a career; it’s about the beginning of a new, often quite active phase of life that could last decades. And while this is something to celebrate, it also requires a plan to make savings last a lifetime. Here’s how retirement has changed and what you can do to plan ahead.

Today’s Retirees May Have a Greater Tax Burden 

Retirees of previous generations may not have worried about their tax burdens as much. Their incomes may have been lower, and they did not have tax-deferred retirement accounts. Taxes may be relatively low right now compared to later in your retirement. Most of the provisions in the Tax Cuts and Jobs Act will expire at the end of 2025, and President Biden recently indicated where tax rates could be headed. Recent proposals include eliminating the long-term capital gains rate of 20% for those making over $1 million and instead taxing capital gains at ordinary income rates.[1]

Income tax rates could also increase, and those with tax-deferred retirement accounts need to consider this. Starting at age 72, you must start taking Required Minimum Distributions (RMDs) from your traditional retirement accounts, which could potentially increase your tax burden and cause you to draw down your account faster. By taking advantage of current rates and working with a professional, you can create a long-term tax minimization strategy for retirement.

Low Interest Rates and Potentially High Inflation Can Complicate Retirement Planning

 Interest rates are at historic lows and could stay low for the rest of your life. If you can’t expect to earn much from your savings account or CD, what other investment options could you consider? Due to the potential for high inflation, you may need to continue to grow your wealth in order to help make it last the rest of your life. There are a number of ways to do this, including guaranteed lifetime income payments, maximizing your Social Security benefit, and creating a retirement investment strategy designed to fit your risk tolerance. 

You’re More Likely to Need Long-Term Care

An estimated 70% of today’s 65-year-olds will need long-term care at some point[2] and costs can be staggering. Medicare doesn’t necessarily cover costs, and Medicaid is difficult to qualify for, leaving many retirees on their own. In 2020, the median yearly cost for an in-home health aide was $54,912, and the median yearly cost for a private room in a nursing home was $105,850.[3] There are several options for covering costs and deciding on one can be an important part of a comprehensive financial plan.

The bad news is that many potential risks come with retirement. The good news is that we are here to help you plan for them and adjust your plan as needed. We don’t have a one-size-fits-all approach, and we don’t look at the many elements of your retirement plan as separate. At LakePoint Advisory Group, we help our clients create comprehensive retirement plans that take their unique financial situations and needs into account. Click HERE to sign up for a complimentary review with us to begin planning.


Lake Point Advisory Group is a tradename. All services provided by Lake Point Advisory Group investment professionals are provided in their individual capacities as investment adviser representatives of Mercer Global Advisors Inc. (“Mercer Advisors”), an SEC-registered investment adviser principally located in Denver, Colorado, with various branch offices throughout the United States doing business under different tradenames ,including Lake Point Advisory Group.

This material is provided for informational purposes and is not an offer to sell or a solicitation of an offer to buy an interest in any security or to engage in any investment strategy. Such an offer may only be made at the time a qualified offeree receives a confidential private offering memorandum or other appropriate disclosure. This report is intended as a summary; it does not purport to be complete. Information contained herein is believed to be accurate and/or derived from sources which we believe to be reliable; however we do not warrant the completeness or accuracy of such information. Opinions expressed herein do not necessarily reflect those of Lake Point or Mercer Advisors. You should not construe this presentation or any other communication received in connection with Lake Point as legal, accounting, tax, investment, or other advice. You should consult with your own counsel and advisors regarding such matters. Past performance is not necessarily indicative of future results. No representation is made that any investment will or is likely to achieve the same or similar results in the future. Investments cannot be made in an index. Alternative investments are subject to greater risks than those associated with traditional investments and are not suitable for all investors.

2021-07-12T03:32:38+00:00July 12th, 2021|Health & Wellness, Retirement Planning, Taxes|