Wealth Insights
Long-term wealth planning: Strategies for 2025 and beyond

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Get insight into wealth planning topics and ensure your financial goals align with your resources.

The year 2025 will be a pivotal time for wealth planning as the financial landscape evolves. It’s an ideal time to evaluate whether you’re on track to realize your near-term and future financial goals and aspirations. “It’s a great time to look inward,” says Bryan Koepp, Wealth Planning Executive for Regions Private Wealth Management.

“Now is the time to review your balance sheet and understand it. What are your assets and why do you hold them? What’s their purpose? From there, ask: How can I make it better based upon my current goals and aspirations?”

Dealing with economic uncertainty

The year won’t be without some market and economic uncertainty. Inflation, though stabilized for now, may reverse course depending on shifts in the political landscape. In a related state of uncertainty, aspects of the tax code are set to expire and interest rates have the potential to take a turn if the economic climate shifts.

So how do you balance the impact—and opportunities—of short-term events while remaining true to your long-term financial plan? “A major purpose of financial planning is to prepare for various scenarios and take advantage of new opportunities that can strengthen your financial future,” says Koepp.

“But at the same time, short-term market and economic conditions shouldn’t cause you to change your overall investment philosophy and financial plan, which reflects your risk tolerance and the time horizon to achieve specific long-term goals. It’s important not to alter your long-term plan for the sake of making changes but rather to be tactical to address a specific shifting need.”

Tax changes ahead?

When the Tax Cuts and Jobs Act (TCJA) was passed in 2017, income tax rates for many taxpayers were substantially lowered, the standard deductions were increased, the alternative minimum tax was reformed, and gift and estate tax exemptions were significantly increased. But these changes are scheduled to sunset at the end of the year, and without congressional action, the tax code will revert to the pre-2017 brackets and rates. This will mean an income tax increase for many taxpayers.

“Meanwhile, the lifetime federal estate tax exemption increased to $13,990,000 per taxpayer, $27,980,000 per married couple for 2025,” Koepp says, “but a TCJA sunset would result in that federal gift and estate tax exemption potentially being cut in half.”

“The tax rules may be extended. They may expire. Right now, it’s still a wildcard regarding the future tax landscape. Regardless of the outcome, we expect to engage in more conversations around generational legacy planning, which often involves the transition of businesses and movement of other assets such as real estate to hedge the impact of future tax legislation,” says Koepp. “Not only might these estate planning strategies result in lower tax exposure, but they may also help build a secure financial future for your heirs.”

What we know about interest rates

In September 2024, the Federal Reserve began rolling out anticipated rate cuts based on stabilized inflation. But with changing tides in Washington, it’s hard to know what comes next.

“We anticipate some pullback, but a lot can change,” says Hollins Rush, Wealth Advisor at Regions Bank. “As we enter into a new administration, it will be important to pay attention to what changes are coming to be prepared for the potential of both a lower and a higher interest rate environment.”

Rush explains that it is important to consider how to manage your balance sheet in a falling rate environment and to know how your position changes if rates rise.

Koepp agrees. “Focusing on your personal balance sheet—something you can control—is critical,” says Koepp. “Inflation has returned to more normalized levels, but the after effect on the prices of goods and services is still felt throughout almost every corner of the world. It is important to keep focused on your long-term goals regarding savings.”

You might also leverage the uncertainty that higher prices can generate to help you prioritize the things that are most important to you. “This can give you a laser focus on your wants versus your needs,” Koepp says, and might help you identify goals and values that can be integrated into your wealth plan. Times like this tend to highlight the value your wealth advisor can bring. “Together you can look at scenarios that take into account the effects of inflation, your expenses and what you want to achieve,” Koepp says.

The first half of 2025 is a crucial time to take proactive legacy planning measures with potential changes on the horizon. “If we are in an environment of no TCJA extension, going into the second half of the year, estate planning attorneys will be extremely busy,” Rush says. “Last-minute planning becomes very difficult. It’s always important to consider what can change in the landscape and bring up these topics with your advisor team sooner rather than later.”

2025 stock market could be poised for gains and potential volatility

As the year begins, there is optimism about the expansion of the U.S. economy and the potential for further stock market gains. Regions market commentators expect the S&P 500 to outpace foreign developed markets in the coming year as capital continues to flow into U.S. assets.

“Our economy is performing better than the rest of the world,” says Regions Chief Market Strategist Brandon Thurber. “We’ll continue to attract capital into U.S. based assets, stocks and bonds, which should lead to outperformance of U.S. stocks relative to other countries in 2025.”

However, the S&P 500 retreated modestly to start the new year and approached oversold territory, increasing the likelihood of a bounce in the near-term, but volatility should be expected as uncertainty tied to immigration and trade is likely to persist and weigh on sentiment to some degree. Make sure you are having ongoing conversations with your advisor to stay on top of a more dynamic economic and market environment and milestones in your life.

“There is always a lot of noise in the markets; there will be even more in 2025,” says Regions Chief Investment Officer Alan McKnight. “You have a new administration, with a new majority in Congress and a new mandate. It’s a situation where you’re transitioning, from an economic perspective. When new policies and new players appear, it creates a lot of noise in the system. That will have an impact both here and abroad.

“The best thing an investor can do is to avoid being reactive, minimize the noise and focus on what you can influence.”

Making a wealth plan for more than just this year

Often people will focus solely on the monthly or annual performance of a 401(k) or an investment portfolio to gauge how well they are doing financially. “But investments and retirement savings are only one component of an overall wealth plan, which provides the roadmap, the guardrails and the confidence to allow you to accomplish your goals over years or even decades,” says Koepp.

A wealth plan starts with a full inventory of an individual’s assets, which often reveals a more favorable balance sheet than many people anticipate. “The accumulation of 401(k) plans, pension plans and various savings accounts can add up,” says Koepp. Only by getting a big-picture view of all your assets can you begin to make informed financial decisions. Are your investments underperforming? Is your asset allocation correct? A wealth plan can also identify gaps that you can work to close with strategies that you may not have previously considered.

A wealth plan evolves with you. “Your ongoing life events and changing priorities are vitally important to capture to make sure that the plan achieves what it's intended to do,” says Koepp. Equally important is to stress-test your plan against various market and economic scenarios.

People may hesitate to create a wealth plan for the first time because they may worry about what it might reveal, says Koepp. “But the report just provides data. The real benefit of wealth planning is the interaction between an individual and his or her wealth advisor,” he says. “By examining various scenarios that will lead to different outcomes, together they can prioritize and target the best options for optimal success in achieving the individual’s goals.” Your wealth advisor can also bring in a team of specialists to address specific concerns and needs.

Another benefit of having a wealth advisor is being able to talk through questions and concerns that arise from our 24/7 news cycle. “Not all financial information seen through traditional news and alternative media may apply to your personal situation. The sheer amount of information can be overwhelming,” says Koepp. “A wealth advisor has the experience to slow down the pace of that information, ascertain its validity and agnostically address clients’ questions to provide solace.”