Retirement plans could be hit by expiring tax cuts, survey finds

With key Tax Cuts and Jobs Act (TCJA) provisions set to expire at the end of this year, many CFP professionals are warning of significant risks to their clients’ financial goals. This is according to CFP Board’s latest research, the 2025 CFP Professionals Taxes Survey.

This year will bring significant tax changes as key provisions of the TCJA, signed into law by President Trump in his first term, expire on Dec. 31, said Erin Koeppel, managing director of government relations and public policy counsel at the CFP Board.

These expiring provisions include:

• Decreased marginal tax rates
• Increased standard deduction and elimination of the personal exemption
• Doubled child tax credit
• Capped deduction for state and local income, sales and property taxes (SALT)
• Doubled maximum estate value exempt from taxation.

Risks to clients’ financial goals

According to the study, nearly 9 in 10 CFP professionals (88%) believe that their clients’ financial objectives face substantial risks, with retirement income (57%) and legacy planning (53%) viewed as the most vulnerable to upcoming tax changes.
Other at-risk financial-planning goals are:

• Charitable-giving strategies (18%)
• Business succession (16%)
• Real estate investment plans (8%)

“If TCJA provisions expire without action by Congress, income tax rates will increase and so will the amount of income that is taxable, leading to reduced disposable income or money available for savings,” added Koeppel. “Limits on itemized deductions and decreases on tax advantages for retirement savings could make it more challenging to save for the future.”

“It’s important to note that the elimination of tax deductions for financial advice under TCJA has created barriers to professional guidance, with 52% of CFP professionals reporting negative impacts on consumer access,” said Koeppel. “Half believe restoring these tax incentives would help more Americans afford professional financial advice.”

The expiration of key provisions of the TCJA could increase taxes, leaving retirees with less money for daily living and long-term expenses, explained Koeppel. Higher taxes will leave less after-tax income for Americans to save for retirement. The rise in taxes on investment returns may also hinder the growth of retirement savings.

In addition, changes in estate taxes, such as larger estates being taxed more, could reduce the amount left for heirs. In general, added Koeppel, legacy planning could become less tax-friendly. “The uncertainty while Congress negotiates a potential extension of the tax cuts, or any uncertainty left in the tax code after Congress acts, could leave consumers hesitant to make financial plans,” Koeppel said.

Recommended solutions for 2025 tax changes

CFP professionals are recommending specific strategies for 2025, including Roth conversions (64%), increased retirement plan contributions (64%), and tax-loss harvesting (61%), according to the survey. These recommendations address clients’ top concerns:

• Retirement account taxation (61%),
• Current income tax exposure (59%)
• The impact of potential tax rate changes (55%)

To improve tax efficiency, financial professionals are implementing comprehensive approaches, with 3 in 4 using strategic timing of capital gains (78%) and employing tax-efficient retirement income strategies (75%). Additionally, 71% of CFP professionals are maximizing tax-deferred accounts to help protect client wealth before the TCJA provisions expire.

Restoring tax incentives could help

The elimination of tax deductions for financial advice under TCJA has created barriers to professional guidance, with 52% of CFP professionals reporting negative impacts on consumer access, according to the survey. Half of the respondents believe that restoring these tax incentives would help more Americans afford professional financial advice.

To expand access to financial planning services, many CFP professionals advocate for an above-the-line tax deduction (46%) or the implementation of a tax credit system (39%). These are solutions that could help more Americans obtain the professional financial guidance they need to navigate upcoming tax changes.

“As we approach the expiration of TCJA later this year, restoring and expanding tax incentives for financial advice could help ensure that more Americans have access to the professional expertise they need to navigate these significant changes and build the future they envision," added Koeppel.

CFP Board’s Research team sent a 15-question survey to randomly selected CFP professionals nationwide. The survey generated responses from 312 CFP professionals when it closed on February 4, 2025.

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