Luke J McCord, CFP® CSLP®

Preparing for Retirement in 2025: A Christian’s Guide to Financial and Spiritual Readiness

Retirement marks a new season—a time to rest, reflect, and pursue God’s purpose for your life. As Christians, we’re called to be faithful stewards of the resources entrusted to us, as illustrated in the Parable of the Talents (Matthew 25:14-30). Preparing for retirement involves both practical financial planning and aligning our hearts with God’s will. At Greenway Financial Planning, we’re here to guide you through key issues to consider for 2025, weaving Biblical wisdom into actionable steps. Let’s prepare wisely for this chapter of life!

Cash Flow: Trusting God’s Provision

Your income and expenses may shift in retirement, requiring careful planning. Proverbs 21:5 teaches, “The plans of the diligent lead to profit as surely as haste leads to poverty.” A solid cash flow plan honors God’s provision. Consider:

Pensions: If you’re fortunate to have a pension, evaluate payout options—single life (pays you alone for life), joint life (continues for your spouse), or lump sum (a one-time payment). Consider how these align with Social Security benefits, timing your claims to maximize income, and coordinate with life insurance to protect your family’s future.
Early Retirement: Retiring before your full retirement age (FRA, typically 66-67 depending on birth year) may reduce Social Security benefits if you earn over $23,400 in 2025, or $62,160 in the year you reach FRA. However, if you leave your employer after age 55, you can access your 401(k) without the 10% penalty—ideal for bridging income gaps. Plan for these limits to avoid surprises.
Marriage & Social Security: If married, explore strategies like claiming spousal benefits (up to 50% of your spouse’s benefit) or delaying your own benefit to increase payouts (up to age 70). If previously married and now unmarried, a divorce after 10+ years may qualify you for benefits on your ex-spouse’s record, or a marriage of 9+ months ending in a spouse’s death may allow survivor benefits. Review eligibility carefully!

Biblical Wisdom: Philippians 4:19 promises, “And my God will meet all your needs according to the riches of his glory in Christ Jesus.” Trust in His provision, but diligently plan your cash flow to steward His blessings well.

Healthcare & Insurance: Caring for the Temple

Our bodies are temples of the Holy Spirit (1 Corinthians 6:19-20), and retirement brings new healthcare needs. Planning ahead protects your health and finances. Consider:

Before Age 65: If retiring before 65, you’re not eligible for Medicare (unless disabled or meeting specific exceptions). COBRA can extend employer coverage for 18-36 months, though premiums may be costly. Alternatively, the Health Insurance Marketplace offers plans, and if enrolled, the Premium Assistance Tax Credit may cap costs at 8.5% of household income—check eligibility based on income and family size.
At Age 65: Upon turning 65, enroll in Medicare during your 7-month initial enrollment period (3 months before to 3 months after your birthday month). Choose Part A (hospital), Part B (medical), and consider Part D (prescription drugs) or a Medicare Advantage plan. Add vision or dental coverage if needed, as Medicare doesn’t cover these. If your modified adjusted gross income (MAGI) exceeds $106,000 (single) or $212,000 (married filing jointly), expect Income-Related Monthly Adjustment Amount (IRMAA) surcharges—plan for this added cost.
Long-Term Care: Proverbs 16:31 celebrates “gray hair as a crown of splendor,” but aging may require support. Long-term care (LTC) insurance covers costs like nursing homes or in-home care, often $3,000-$10,000 monthly without coverage. Self-insurance (saving personally) or assisted living communities are options. If you have LTC insurance, review policy details—benefit amounts, waiting periods, and inflation adjustments—to ensure it meets future needs.

Biblical Wisdom: James 1:5 urges, “If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you.” Pray for guidance to care for your temple in retirement.

Assets & Debt: Stewarding God’s Gifts

Retirement is a time to reassess assets and debts, honoring Luke 16:10: “Whoever can be trusted with very little can also be trusted with much.” Manage God’s gifts wisely with these steps:

Stock Options & Annuities: If you hold stock options, grants, or restricted stock units, retirement may affect vesting or exercise periods—check your plan’s rules. Exercising options could trigger taxes (e.g., ordinary income or capital gains), so model the impact on cash flow and tax liability. Annuities or illiquid assets (e.g., real estate) may lock up funds—review contracts for surrender charges, payout options, or liquidity to align with your needs.
Business Owners: If you own a business, a succession plan (transferring to family or a partner) or exit strategy (selling) ensures continuity and financial security. Start early—valuate your business, identify buyers or successors, and consult tax and legal experts to minimize taxes and honor your legacy.
Loans & Accounts: A loan from a 401(k) must typically be repaid within 60 days of leaving your employer, or it’s treated as a taxable distribution with a 10% penalty if under 59½. Plan repayment or avoid rollovers until settled. Consolidate multiple 401(k)s or IRAs to simplify management and reduce fees. If relocating, a new residence may raise or lower state taxes, affect cash flow, or disrupt your Medicare Advantage plan if out of network—research carefully.

Biblical Wisdom: Proverbs 22:7 warns, “The borrower is slave to the lender.” Aim to enter retirement debt-free, trusting God to guide your asset and debt decisions.

Tax Planning: Rendering to Caesar

Jesus teaches in Mark 12:17 to “give back to Caesar what is Caesar’s and to God what is God’s.” Tax planning balances this duty with stewardship:

Required Minimum Distributions (RMDs): After age 73, RMDs from 401(k)s and IRAs are mandatory, taxed as ordinary income, and can push you into a higher bracket. In 2025, estimate your RMDs (based on account balance and life expectancy tables). Consider Roth conversions—moving pre-tax funds to a Roth IRA, paying taxes now—to reduce future RMDs and enjoy tax-free growth, especially if income drops early in retirement.
Estate Planning: The 2025 federal estate and gift tax exclusion is $13.99 million (single) or $27.98 million (married). If your estate exceeds this, taxes (up to 40%) may apply. Strategies like gifting assets now, setting up trusts, or leveraging annual exclusions ($18,000 per recipient in 2025) can minimize liability—consult an advisor for a tailored plan.
Charitable Giving: If charitably inclined, giving can lower taxes and bless others. Donate appreciated assets (e.g., stocks) to avoid capital gains tax, or use a Qualified Charitable Distribution (QCD) from an IRA after age 70½ to offset RMDs. Reflect on 2 Corinthians 9:7, “Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”

Biblical Wisdom: Store up treasures in heaven, not just earth (Matthew 6:19-21). Plan taxes wisely, but keep your focus on eternal impact.

Other Considerations: Finishing Well

Tie up loose ends as you near retirement. Ecclesiastes 3:1 reminds us, “There is a time for everything, and a season for every activity under the heavens.” Finish well with:

Vacation Days: Check for unused vacation days—some employers allow you to use them before retiring, extending income, or pay you for unused time, often at your regular rate. Review your contract to maximize this benefit.
State-Specific Issues: Each state has unique rules—some tax Social Security or retirement income, others don’t. For example, Georgia exempts some retirement income for those 62+, but limits vary. Research your state’s tax laws, property taxes, and cost of living to adjust your plan.

Biblical Wisdom: Seek God’s guidance for this season, running the race with perseverance (Hebrews 12:1) to retire with purpose and peace.