As 2025 begins, it’s the perfect time to hit refresh on your financial goals that you may have procrastinated over the past year or more. The start of a new year symbolizes opportunity—a chance to reset, rethink priorities, and lay the groundwork for long-term success and financial freedom. Among the most common resolutions that people tend to dedicate themselves to are financial ones: this umbrella includes creating a budget, saving more for short and long term goals, and preparing a prosperous future.
When looking toward the future, many people want to attain one where a large portion of their income can grow passively over a long period of time. But actually making this a reality requires swift action many years in advance. No matter how you put it, maximizing income during this life stage is an essential part of assessing the outlook of anyone’s financial future.
While each individual may be attached to their own unique method of wealth building, there are a few key strategies to keep in mind to max out retirement income. Consider this as a general rulebook, but not necessarily a strict set of operations to follow.
“To create attainable financial goals during retirement, start by meeting with a trusted financial advisor who understands your unique needs, audit your investments and savings, implement tax mitigation strategies, and establish estate, gift, and charitable tax plans,” advises Stewart Willis, President of Asset Preservation Wealth & Tax. “These foundational steps not only position you for financial security but also provide the flexibility needed to thrive during retirement.”
You may think you’re a financially savvy person, but chances are, your advisor will know even more.
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Meet with a Financial Advisor in Your Region
Retirement planning isn’t a one-size-fits-all script. State tax laws and regional cost-of-living differences can greatly impact your strategy. For example, residents of Portland, Oregon, benefit from no general state sales tax, but many work across the nearby border in Washington State, which has a retail sales tax of 6.5%. These nuances highlight the importance of meeting with a financial advisor who deeply understands your specific regional circumstances.
“Building a personal relationship with your advisor is critical,” says Willis. “Financial advising is not just about numbers—it’s about understanding each individual’s unique life story, current and future goals, and areas of concern. Willis also notes that when possible, prioritize In-person meetings – rather than virtual – which strengthen interpersonal relationships, allows for a stronger, more meaningful professional relationship, and opens up the door for a more tailored financial plan that fits your specific financial situation.
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Audit Investment and Savings Amounts
A thorough audit of your current investment and savings accounts is crucial to ensuring your retirement plan stays on track. Think about it this way – imagine approaching retirement, ready to enjoy the fruits of all the hard work you’ve put in over the past several decades, only to find out that you’ll need to work a few more years because your savings are insufficient to leave the workforce.
Willis feels strongly about reassessing your portfolio at least one to two times a year, using the beginning of January as a natural check-in time.
“As the new year begins, it’s the perfect time to reassess your portfolio, ensuring it’s diversified for growth while shifting toward stable, income-generating assets like dividend-paying stocks, REITs, or municipal bonds to protect your wealth and align with tax-efficient strategies.
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Mitigate Taxes
Effective tax strategies can go a long way in boosting your retirement income. A balance of taxable, tax-deferred, and tax-free accounts offers flexibility in how you withdraw funds during retirement. For example, Roth IRAs. can be a valuable tool for tax-free growth and withdrawals. Identifying opportunities for Roth conversions during lower tax years is another strategic move to consider during the conversation with your financial advisor.
Changing tax laws year over year can get confusing, which is where a professional’s expertise can make the process much more manageable. Keep in mind that regardless of how much retirement income you have waiting in the bank, you’ll want to withdraw funds in the most efficient way possible, in alignment with these aforementioned tax laws.
For many individuals, this means prioritizing taxable accounts first, then tax-deferred accounts, and saving Roth accounts for later years when they might be most beneficial.
For retirees who anticipate a shift in their tax bracket—such as a decrease in income after leaving the workforce—a financial advisor can further help determine the most advantageous withdrawal strategies for each stage of retirement.
Again, each person’s retirement strategy – especially from a financial perspective – will look and feel unique. So don’t get bothered with comparing yourself to others – it’ll be an unnecessary source of stress.
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Estate, Gift, and Charitable Tax Strategies
Retirement planning isn’t just about your own financial needs; it’s also about ensuring your legacy is protected and aligned with your values, setting your children, grandchildren, and more generations up for financial wellbeing.. Implementing estate, gift, and charitable tax strategies can reduce tax liabilities and benefit both your loved ones and the causes you care strongly about.
“Establishing trusts is one of the most effective ways to protect your assets while minimizing estate taxes,” says Willis. “Irrevocable trusts and charitable remainder trusts, in particular, can offer dual benefits of safeguarding your wealth and supporting philanthropic causes that are close to your heart.”
Maximizing annual gift exclusions and lifetime gift exemptions is likewise an effective way to transfer wealth without triggering significant tax consequences. Philanthropy can also play a role in your retirement plan.
According to Willis, donor-advised funds and private foundations offer efficient ways to give, while donating appreciated securities allows you to avoid capital gains taxes and make a meaningful charitable impact.
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Looking Ahead to Your Retirement
2025 is here, and it’s offering a fresh opportunity to really take control of your financial future and create the retirement you desire and deserve. Different stages of the process to approaching retirement may entail differing financial metrics, but the common denominator is simple: a willingness to learn, work closely with a financial advisor, and be open to restrategizing your assets to effectively meet goals that allow for the continual building of wealth.
By taking these proactive steps, you can create a retirement plan that not only adapts to life’s changes but also empowers you to enjoy financial stability and peace of mind throughout your golden years.
- Related: Can You Do a TSP Rollover to an IRA?
- Related: Recharacterization vs Roth Conversion: A Simple Guide
This article originally appeared on Apsitaxes.com and was syndicated by MediaFeed.org
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