5 Retirement Issues the Middle Class Will Face in 2025

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Think retirement planning is tough now? Well, buckle your seatbelts because things are about to get a bit rockier in the coming year. The middle class faces some serious challenges in 2025.

Here’s what financial experts say you need to watch out for if you’re facing retirement issues in the middle class.

Healthcare Cost Crunch

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“A 65-year-old couple retiring today can expect to spend over $300,000 on healthcare costs during retirement,” warned Brent Weiss, CFP and head of financial wellness at Facet. And that’s not even counting long-term care.

His advice? “Review your Medicare coverage annually. One of the biggest retirement mistakes I’ve seen in my 20-year career is retirees allowing their coverage to automatically roll over into the new year.”

Social Security Squeeze

Dr. Barbara O’Neill, CFP and expert at RetireGuide, points out that “Social Security will be an income mainstay for many future middle class retirees and its future is uncertain.” Meanwhile, “many working adults underestimate — or don’t estimate — how much money they will need to cover retirement living expenses and desired leisure activities.”

The Inflation Battle

Even though inflation cooled in 2024, O’Neill noted that “many middle class families haven’t ‘felt’ it and this will likely continue in 2025.” Rising costs of basic necessities like food and housing, keep making it harder to save.

The House-Rich, Cash-Poor Dilemma

“On average, middle class households have more equity in their homes than in their retirement accounts,” Weiss said. He believes people should consider “downsizing strategically” or exploring options like renting out part of their home to create extra income.

Tax Uncertainty

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“We’re in a rapidly changing and uncertain environment,” said Stewart Willis, president of Asset Preservation Wealth & Tax. “With the Tax Cuts and Jobs Act possibly ending, we know taxes are ‘on sale’ now, and people should take advantage while they can.”

The middle class is getting squeezed from all sides. But with some smart planning and the right moves now, you can still build a secure retirement. Just don’t wait until 2025 to start figuring it out.