Why 2025 Could Be the Smartest Year to Retire

With all the market noise and new policy changes in 2025, many experts are calling this the smartest year to retire. In this week’s episode of The Capitalist Investor, Tony and Derek break down why this moment could represent the perfect storm for retirement planning.

From locking in market gains after a massive run-up, to taking advantage of favorable tax brackets, to new rules for contributions and deductions—this episode uncovers the key opportunities retirees shouldn’t overlook. The guys also discuss healthcare and Medicare alignment, Social Security timing, and how lifestyle trends are reshaping what “retirement” looks like.

Whether you’re one year away or still in the planning phase, this conversation will help you think strategically about your retirement timing.

Stay tuned until the end for a quick bonus chat on the Ryder Cup and why the U.S. vs. Europe matchup is about more than just golf.

👉 Questions or topic suggestions? Reach out to the show—we love hearing from listeners who want to take control of their financial future.

Transcript

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With all the market noise and new policy changes in 2025, some experts are calling this year to be the smartest time to retire. This week on the capitalist investor. We're going to put our spin on this exact topic. Tony, what's going on today, man? How are you? What's up man? Just, I'm just ear to ear browns when the fix of the year. That's what I'm going to call it. But I'm not going to go. That's a whole. I can do a whole podcast on this last week of fixes in the NFL, the Browns, the Browns one. That's all we need. That's all we need to know. That's all we need, and that's all we need. But how about you, man? How are you doing? I'm doing well. Yeah. Can't complain at all. The, the the Baltimore Ravens and the Kansas City Chiefs play this week. And one of the two will go to one and three. So that always makes me happy as well. Not a fan of the Chiefs over here. You said you said Baltimore. Yeah Baltimore. We need that. Yeah it's a Browns fan I need that in my life. So, So yeah what a dismal what a dismal division right now. Like Holy cow, I again, I'm just getting my Browns rant. But like, what did the whole I mean it's not good. It's not good. It's not the Steelers stink but they they always find a way to win at the end it seems. Yep. And kudos to them. Yeah. Because the Browns find ways to lose at the end. So all right we got to get out football. What are we talking about there. Well it is also Ryder Cup week so we should match up and. All right. Yep you're right. But yeah. 2025. Why? It is the possibly the best year to retire. And, you know, we, come up with these topics and we, we see them kind of, you know, place in front of us and it's like, yeah, you know what? This doesn't make a lot of sense. So, you know, I got actually quite a bit of, feedback from last week's episode, so. So that was good. Everyone seemed to really enjoy that topic of, you know, not only, spending, you know, some people said, you know, it was like, hey, you know, we're just telling everyone to spend. No, we're not I'm not telling you. It's the opposite of that. Right? Yeah. It's like, hey, you have the potential to spend. Yeah. If you like. You says it's okay if your plan can say it's okay. I don't want you to go out and hit the ground running. I want you to ease into that. But this week, it's like, hey, if you're still working, why is 2025 the best year to retire? Yeah. So we got some, some, some good ideas on why it would be so. First things first is let's talk about the market we have. We're in our third year of a complete market melt up. Now back in April you would have thought like oh my God, the world's coming to an end. Markets down almost 20% right in April. But we have catapulted, out of April and we are 35%, up from the April lows and we're up 13% year to date. So accounts are up still. Yep. Right. And plus, if you're still working, you're probably making contributions. So like that actually helps the, you know, the account grow as well. The other opportunity though is if you are working and you are contributing to a 401 K, this is your opportunity to lock in the gains. While the markets are, you know, near or at all time highs. Because what a 401 K at the end of the day really is. It's a growth machine. There's nothing in there other than growth products like mutual funds, ETFs, things like that. They're they're the other side of that equation is that they're not very sophisticated. They're meant for growth. Well, if they're meant for growth, that means they're meant for high losses. When the market's not growing. Right. So remember back in what 2008 everyone's 401 K became a 201 K. Yep. So that is the one thing you need to to consider. It's like walking in the games. Right. Because I'm not telling you to retire and take your 401 K and dig a hole in your backyard and bury the cash. Yeah, right. I'm telling you, you can add sophistication to lower the you know, you might lower the highs, but you're going to lower the lows. You're going to you're going to be able to balance this thing out where you probably don't have that opportunity in a 401 K. So those are those are my things. Because in a 401 K what do you got. Target funds limited options, no alternatives. This is your opportunity to lock in those gains and add some of these items that can keep you from the volatility of what a 401 K really is. Yeah for sure. Yeah. You know before we started recording we're talking about taking the opposite of the public and NFL football games. That's always a good strategy. The oh not always. But I'm just joking there. But the you know, when everyone is, you know, it's rainbows and puppy dogs and everyone's happy in the market. You know, those are typically the times where, you know, you see an unexpected correction. I'm not saying that's coming around the corner. I'm just saying that's kind of how it how it usually works out, you know, and like, you know, Warren Buffett said, when there's blood out there in the streets, that's that's a good time to invest. So I am a huge proponent of locking in gains, especially if you are, you know, going to retire in the next year or so. And, you know, I'm, I'm working with some of my clients whose, you know, accounts have bubbled up over the, the last two years, to, to lock in some of those gains as well. You know, there's, just because you get a little bit more conservative, that doesn't necessarily mean you have to be less sophisticated, like Tony was saying as well. You know, you can you can lock in some gains into some protected products. You know, if the market goes down over the course of the next year, you protect those losses. And then kind of on the upside, the next year you're going to you're going to participate and a lot of that upside as well. So yeah locking in gains is is something I'm a big believer in. Yep. And you can create other buckets. Yeah. Right. Absolutely. That that some are bent for growth. Some are stability some are income. All of that stuff. Next thing is new policy and tax rules, you know, are locked in with the, one big beautiful bill was passed, several tax provisions and retirement account changes, from this bill have taken effect. So some of the things that just kind of come to mind immediately to me are lower tax brackets are locked in. That's a good thing. Additional standard deduction for of six K for people over 65 with incomes of, you know, if you're single, 75 grand or 150 grand, but that is now an additional money that you can that is going to drop to the bottom of your checking account where it really counts, right. The Salt deduction, the caps were raised from ten grand to 40 grand. And starting next year, there will be an above the line charitable deduction of one grand if you're single or two grand if you're married. Basically you just, you know, you weren't able to do this before because the standard deductions were so big. But and now gives you an additional two grand that you can write off. Yep. That's nice. So those are some of the things that that stick out immediately with the new policy changes. Yeah for sure. You know, and also kind of, one of the points I wrote down here, you know, we were staring down the barrel of a, you know, $5 trillion tax and spend, strategy that the, the Democrats were, were trying to roll out around election time. So, you know, we always say this show really isn't a, you know, kind of a partizan, you know, political takes. You know, we talked extensively about how worried we were about the potential, you know, tax consequences of a, Kamala Harris presidency. And we avoided it. And now, like Tony just laid out, we're in pretty much the the best tax environment of our life. Lifetime. Yeah. Even better than 2016, in my opinion. Those extra standard, the extra 6000 bucks on the standard deduction that's going right to the bottom line of a lot of my clients. You know, accounts like Tony mentioned. So the tax situation is is extremely, extremely good. And one that you should plan for in retirement. Yep. And the only thing I would add is, you know, the lacking in the, the, the tax rates were great. I think the next step is like getting these tariffs under wraps and under control. It's going to create a lot of clarity for businesses to spend money. Yeah. So hopefully, you know haven't hasn't been ahead of the topics lately on, you know, the newsreels and things like that. But it's they're still there. All right. All right. Increased limits for ketchup and UN contributions. Well, this is always just kind of a, a staple, right? You're able to have your ketchup provision. So if this if you are going to retire maybe this year or in 2026, you know, you can squeak out some max contributions right before retirement, into your 401 cage or IRAs. And that's, you know, like when I say when you, when you retire, you're you're done. You're done. You know, earning. And that's the big thing, like, and you can't save anymore. Right? You're, you're, you're immediately spending. So and that's what you build your nest egg for. So get it while you can right. Contribute while you can, because there's a infinite amount of time that you can only do that right. That you can only do it for a certain amount of time, and you have to have W-2 wages. Yep. Finite I think. Finite. Yeah. Sorry, not infinite I gotcha. Yeah. That's me and my Tony is my bad. Health care and Medicare alignment. So you know, there's a lot of talk on and I'm going to talk I'm going to add a bonus part here on social Security in a moment. But health care, Medicare alignment, you know, that's there's it's always going to be increased. And another way to really look at this is that, you know, I feel like that's why the standard deduction was increased so that it's, it's it's more money in people's pockets for increasing cost of things we almost can't control. Right, right. And that's health care and, you know, and health care and Medicare alignment, you know, costs. So that was another thing from the bill. That again, we're trying that they're trying to stabilize all those things. I think they're, you know, they're marching up a slippery slope that they just they just they're going to be have a hard time doing that. Right. So but with the standard deduction you can look at that as not free money, but money that can be used for increasing costs around you. Yeah for sure. And I think, you know talking about planning and everything, the being able to account for increases in health care expenses, is something that you should definitely be taking a look at because, I don't see the cost of health care being below the level of inflation ever again. So that is something that that you want to make sure you have accounted for in your plan. To be able to, pick up those extra costs if they come. Yep. Okay. Lifestyle and work trends favor flexibility. More companies are offering, phased out retirement or part time work. The old saying, you know, hard heart, you know, it's hard to find good help in, you know, experienced help. So like, that's exactly it. You know, there are a lot of companies there are I, I see a lot of people retired and they're still just working a couple hours a week, just a stay busy extra income while they are quote unquote retired. And the employers need it because as a part time worker, it helps them out with benefits and things like that. So they don't have to pay as much in benefits. But if you're of age you shouldn't have to worry about that. So the only thing I would say though is you have to be careful on the balance because I one stance is always hey when you retire take Social Security as soon as you can. But if you're going to work part time, it could work against you. So again, everything about this is is calculated, locally in our closing comments, it's like, hey, just don't jump into the deep end because Tony and Derek said it needs to be calculated, it needs to be discussed. And needs to be talked about. But that's another thing, right? Be careful when you turn on Social Security, because do you plan on having a side hustle in retirement? Right. Absolutely. So and that, you know, that side hustle, you know, it's we see it quite a bit. And then, you know, just some non-financial advice. It seems to me the, my clients, you know, that they can they can handle, like, kind of one, you know, fairly large, like part time assignment, you know, for about a year or so. And then and then they kind of get sick of just, you know, just doing that too. Right? So, everyone is different out there. You know, I, I also have clients that, you know, work five, six, 7 or 8 years past one when they actually need to just because you know that that's, you know, what they do, that's what they enjoy. So, always use potential part time income as a kind of a what if scenario in your financial plan, because it may not be there forever. Right. Right now though, like we're talking about, it's it seems like companies are really, really trying to to squeeze as much as they can for the, for these part time retirees. I'm not sure it's going to last forever, though, so don't make it the base case of your plan, but something that's a real nice bonus that can, you know, expand your lifestyle in retirement. Yeah, I, I like adding a plan of not adding additional work. If you do, that's just gravy. Right, right. So all right. And then I'm just going to add an extra topic here. Social Security always the stance of get it while you can because I don't know the future right of Social Security. The trust funds supposed to run out and, you know, 6 or 7 years. That's crazy that that number keeps on getting so close. Yeah. But who knows what's going to happen. They ain't going to. They ain't going to fix it until it's on our doorstep. Yeah. No politician's ever going to touch solutions to Social Security because it's going to cost them their election. Right. Who's going to do that? No one. Right. So again, get it while you can. But in in because $110 today it me it could be 70 cent dollars in a couple of years. Never know because you don't know how they're going to fix it. But all right, with that being said, like I mentioned before, don't just. Hey, Tony and Derek and Tony said, retire. Go do it now. Don't do that. All right? Talk to your advisor. Run some numbers. Get a plan, get scenarios. Right. Hey, like, a good scenario is like, hey, I retire. Oh, man, the market tanked. Whoops. I planned it all wrong. Like, build out a bear scenario. A bear, a bear, bear market scenario where day one, you retire, your accounts are down 20% on day one. I mean, it's very aggressive, right? But that's good. We want aggressive in a plan. We want to really stress it. Right. So that's a good stress test. The other thing is it's like jumping into the deep end. Well, you know, you can't go back. There's a good possibility that, hey, you can't get your old job back and B, you might not want to go back. Right? Right. You're just mentally checked out and you're done. So you gotta be prepared to make the decision. But the other thing is, is we talked about a little bit and started insinuates like, now you now is the time, though that you can start considering doing protective provisions in your liquid investments for your retirement because you can lower risk. You can add more diversification from a 401 K, you can add non correlated assets that aren't available in your 401 K. So that could be annuities. That could be alternatives like real estate private credit private equity. There's a lot of things that you can do that are non correlated asset classes to the stock market. And that is probably your best. The silver lining if you retire is is bolting on sophistication to your retirement accounts. All right Tony. Well good show this week. Before we, we do the, the old sign off here, a little bonus material. So if you don't want to hear about the Ryder Cup for the next two minutes, you can probably turn this off right now. But before you do, if you have any questions, or want to hit us up about financial topics, hit us up at future topics, comments, questions, you know, drop us. Drop us questions about your retirement. You know, we're we're, very serious about this stuff, obviously. And, you know, it's just talking to someone is just talking to someone. So, you know, reach out if you have questions because this is this is important stuff. With that said, a huge, huge weekend in, weekend, weekend in golf, Ryder Cup headed back to the U.S, and New York City, basically. Was it Friday, Saturday and Sunday. Right. Yeah. Oh, man. Bethpage black. Yeah. Yeah. So historic course. Some of the Rowdiest fans in the world are going to be there at one of the Rowdiest events out there. So it is going to be it's going to be intense. It really is. They're going to be screaming I mean I don't know, I, I think it's just going to be loud. Can you because they're going to be like the waste management kind of attitude or is it going to be a little bit more civil? You know, I think the waste management is more of a like a party atmosphere. Okay. I think it's going to be more serious. At Bethpage. Yeah. Yeah. I think it's going to be more, more heckling. You know, I, I don't know how it doesn't get out of hand, quite honestly. The, the Europeans just absolutely destroyed us last time. You know, I haven't looked at the odds. Honestly, I probably should have. But I don't know how I, I guess we would probably favor it a little bit, since this is, since it's at home. But I'd say golfer for golfer. I'd say we're we're probably underdogs. You think? All right. So we have Scottie Scheffler Matthew Bean money. Why don't you look up the odds while I kind of rattle this off. JJ spawn, he won a major this year. You got Shapley. Russell Henley's always, a dart thrower. English. Steady, Eddy. Kind of guy. DeChambeau is just there for the excitement of the long drive. But he's got skill. You know that, right? I mean, he does well on on the live. JT, Justin Thomas, Collin morikawa, one of the straightest ball strikers in the world. Ben Griffin, Sam Burns, Cantlay and young. Now for the Europeans you got Rory McIntyre Fleetwood Mac I like Fleetwood man. That dude's a ball striker too. He finally got his first victory this year. Justin Rose has really turned his career over. Should have never bought or should ever got after those one set of clubs. And that wrecked his career for five years. I hope he made enough money on that. Hatton. I like Hatton to his cause. He's fiery guy. Lowry. If there's bad weather, man, you got some. You got some of these guys that are good bad weather. I wonder, is the weather supposed to be good over there? I think I think so anyway, Shane Lowry, Jon Rahm, stock. Hovland. Abe. Wow. This team stack. Yeah. Oh, God. This is not looking good for I mean, just on paper, it doesn't look, that does not look favorable for the United States. Yeah. What are the odds on this thing? It's surprising. It's, USA -145, basically. So. So probably, like, plus 120 if you want to take, as plus 155 for Europe, is it? Okay, so if you bet, you have to be at $145 to win$100 if you want to, take the euros. Yeah. Oh, the the the the, the US's favorite. Yeah. The U.S. Okay. Minus one -145. Wow. That's crazy. This is going to be good. I don't know, like these golfers are. You know, it's not this. It's not the same. I guess what I'll say. That's not the same names you're used to seeing anymore. Like, some of these guys are new. They have reconstructed their game. But you do have some oldies but goodies like Justin Rose. But, the format is constantly changing every day, right? So it's going to be great. And I think a lot of those there's going to be a lot of, you know, Americans out there cheering raw, you know, just being rowdy. I think it's going to yeah I think I mean, I think the last time wasn't the last time they were there. Like it was just rowdy or just here in general. Like it was just. Yeah. So it was when Brooks Koepka, won the the PGA, the last major at, Bethpage Brooks won. Yeah. It was either the U.S. open or the PGA. And it was rowdy. Yeah, it was rowdy. And that was just a that was just a major like, this is this is an international event. Yeah. So, you know, I think it shows, you know, how much of a factor the crowd is going to play since, you know, I have very little confidence in the U.S team past really the third player honestly. And they're they're pretty big favorites. So, but you know, if, if I had to take someone, I would definitely take the European team plus, plus of the points, as they say. They seem to be a team on a mission. And the U.S team does not appear to have, you know, comradery as of of old. I really wish, Keegan Bradley would have played. Yeah. Me too. I like that dude's nails, man. Yeah, but the weather looks great. Friday, Saturday, Sunday. 20% chance of rain every day. Low 80s, I mean, you know, high 70s, low 80s. It's going to be perfect weather out there. Yeah. So it's one of the greatest, one of the greatest golf events of, of the year, for sure. Only happens every two years. But, it should be it should be intense. Should be fun to watch. Yeah. I'm excited, I'm excited. And if you've ever watched it, you know, first couple days could be kind of boring. It's kind of like the last day when people really need to show up to win for their team. Right? Last days, individual matches. So it's one on one. Yeah, it's good stuff. It is. Yeah. All right man. All right guys, we'll, we'll talk to you next week. The opinions expressed in the podcast. 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