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Special Report: Important Updates for Retirees with Over $700,000 Saved
Reaching $700,000 or more in retirement savings is a major accomplishment. It also places you in a group that faces unique opportunities - and unique risks. The decisions you make over the next few years could determine whether that wealth sustains your lifestyle or quietly erodes under taxes, health costs, and market volatility.
By Nate Crannell
September 30th, 2025 | 4 Min. Read
We’ll cover many of these changes in depth at the upcoming Retiree Update Workshop in West Des Moines, IA! But for those who can’t make it, here are 5 key updates in 2025 every retiree with $700,000+ saved should know about:
1. Social Security’s 2025 COLA is Smaller
Benefits increased by 2.5% in 2025, a modest raise compared to the high adjustments of recent years. For retirees with larger portfolios, the real risk isn’t whether the COLA keeps up with inflation - it’s that a higher benefit can push your income over Medicare premium thresholds. That means paying more in monthly surcharges (IRMAA).
What to do: Coordinate Social Security timing with withdrawals and Roth conversions so that your income doesn’t cross those costly cliffs.
2. Medicare Premiums & Drug-Cost Cap Changes to Watch in 2025
• The standard Part B premium for 2025 is $185/month.
• Under the new Part D rules, there is a $2,000 annual out-of-pocket cap on covered prescription drug costs.
Medicare’s income-related surcharges (IRMAA) remain a key exposure: for 2025, single taxpayers with MAGI above $106,000 or joint filers with MAGI above $212,000 will pay additional charges to both Part B and Part D.
Because IRMAA is based on income from two years earlier, a one-time spike (such as a Roth conversion or capital gain) can unexpectedly push someone into surcharge territory.
What to do: Watch your modified adjusted gross income closely. Even one extra Roth conversion or capital gain can move you into a higher bracket.
3. Final Rules on Inherited IRAs Take Effect in 2025
Starting in 2025, many non-spouse beneficiaries must take annual required withdrawals in years 1–9 and still empty the inherited account by year 10. That’s a big tax acceleration if your heirs inherit seven-figure balances.
What to do: Consider Roth conversions during your lifetime or charitable strategies like Qualified Charitable Distributions (QCDs) to ease the tax burden on heirs.
4. 2025 Contribution and Withdrawal Levers
Even in retirement, some households can still access IRA and retirement plan strategies. Here are the 2025 limits and opportunities:
• For 401(k) / 403(b) plans, the basic elective deferral limit is $23,500. Participants aged 50+ may make a catch-up contribution of $7,500. Those aged 60 to 63 may qualify for a higher “super catch-up” of $11,250 (if their plan allows).
• For IRAs, the standard contribution limit is $7,000, rising to $8,000 for those 50 and older.
• Qualified Charitable Distributions (QCDs) are capped at $108,000 per person in 2025. The QCD can satisfy your RMD for the year (but cannot be carried forward beyond that).
What to do: Use these levers strategically - especially QCDs, which are powerful for high-net-worth retirees who give charitably and want to keep income below IRMAA thresholds.
5. Estate and Gift Planning Before the 2026 Sunset
What changed federally: For 2025, the federal estate & gift exemption is $13.99 million per person. Beginning in 2026, new federal law keeps the exemption elevated (set to $15 million per person, indexed thereafter) instead of letting it “sunset” back to ~half.
In short: the feared 2026 drop was averted by the 2025 tax law.
The part most retirees miss: State taxes didn’t automatically change. States run their own estate and/or inheritance taxes with separate thresholds and rules; most state regimes were not altered by the federal bill. A dozen states plus D.C. still impose estate taxes, and six levy inheritance taxes - often at much lower thresholds than federal (e.g., New York ~$7.16M; Oregon $1M; Washington moved to $3M mid-2025). Your exposure depends on your state of domicile and where your assets are located.
What to do (action steps for 2025–2026):
Check your state’s rules and current exemption - don’t assume the federal change protects you from state-level estate or inheritance taxes.
Coordinate titling & situs: Real estate or business interests held in states with their own “death taxes” can drag your estate into those systems.
Update documents (wills, revocable trusts, powers, beneficiary designations) and model outcomes under your state’s thresholds and rates.
If charitably inclined, consider lifetime strategies (e.g., donor-advised funds, CRTs) that also help manage income/IRMAA exposure in retirement.
For larger estates, review portability, SLATs/ILITs, and gifting plans in light of the current federal exemption and your state tax landscape.
The Bottom Line
Having $700,000+ saved puts you ahead of the curve, but it also means you’re exposed to the real risks of higher taxes, Medicare surcharges, and estate law changes. Staying ahead of these shifts is not about chasing the latest product or investment - it’s about avoiding costly blind spots.
That’s why we publish Retirement Red Flags - to help retirees like you spot the pitfalls and protect the lifestyle you’ve earned.
Stay Ahead: Join Us in West Des Moines
The rules, taxes, and hidden traps that affect retirees with $700,000 or more are shifting faster than ever. Reading about them is one thing - but seeing how they fit together in your personal retirement picture is another.
That’s why we are hosting our Annual Retiree Update Workshop in West Des Moines. It’s a straightforward, educational session designed to help you:
• Understand the most recent changes in in taxes and estate planning for retirees.
• Spot the “red flags” that quietly cost well-prepared retirees thousands.
• Learn strategies to protect your income, avoid unnecessary taxes, and strengthen your legacy.
This isn’t a sales pitch – it’s about clarity, not products. Most attendees leave with two or three action steps that can make a measurable difference in their retirement.
📅 Reserve your seat now for the next Retiree Update Workshop in West Des Moines. Space is limited.
👉 [Register Here]
Because common sense isn't always 'common', here is the legal disclosure: This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Retirement Red Flags does not guarantee the accuracy or completeness of the information provided. All investments involve risk, including potential loss of principal. Readers should conduct their own research and consult with a professional advisor before making any financial decisions. I am not an attorney, CPA, or financial advisor.
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