Retirees who have a financial plan are markedly less likely to feel financial stress, according to research released August 20 by Cerulli Associates. In its latest retail investor report, the firm found that 40% of retirees report moderate or higher financial stress, compared with 29% of those who have a plan. For affluent retirees, a large part of what such a plan covers is taxes: which accounts to draw from, when to convert savings to Roth accounts and how to keep income below thresholds that raise Medicare premiums.
What the research found
The data appear in The Cerulli Edge, U.S. Retail Investor Edition, 3Q 2026. Inflation was the most commonly cited source of high or very high stress, named by 21% of retirees, followed by health care expenses at 16% and the possibility of an economic downturn at 14%. John McKenna, a senior analyst at the firm, said a detailed plan that is updated periodically can relieve stress while helping advisors choose investments and products that support retirement goals.
The survey measures association, not cause. Retirees who build plans may also have more assets or more financial experience. But the 11-point gap is consistent with the idea that knowing where income will come from, and what it will cost in taxes, reduces anxiety.
Who is affected
The finding is most relevant to households entering retirement with a mix of pre-tax 401(k) and IRA balances, Roth accounts, taxable brokerage holdings and possibly pensions or deferred compensation. Their tax bill in retirement is not fixed; it depends heavily on the order and timing of withdrawals.
The after-tax math
One of the most concrete costs a plan can manage is the Medicare income-related monthly adjustment amount. According to CMS, the standard Part B premium for 2026 is $202.90 a month. Joint filers with income above $218,000 pay surcharges that rise in tiers, from $81.20 a month per person in the first tier to $487 at the top, for income of $750,000 or more.
| Joint income used for 2026 premiums | Monthly surcharge per person |
|---|---|
| $218,000 or less | $0 |
| $218,001 to $274,000 | $81.20 |
| $274,001 to $342,000 | $202.90 |
| $342,001 to $410,000 | $324.60 |
| Above $410,000 and below $750,000 | $446.30 |
| $750,000 or more | $487.00 |
Example, illustrative round numbers: a married couple, both on Medicare, expects income of $270,000. A $10,000 IRA withdrawal or Roth conversion would push them to $280,000, across the $274,000 line. Their surcharge would rise from $81.20 to $202.90 a month each, an extra $121.70 per person, or about $2,920 a year for the couple, on top of the income tax on the $10,000 itself. Because the tiers are cliffs, a single dollar over a threshold triggers the full increase.
Other thresholds interact with the same decisions. The 3.8% net investment income tax applies to investment income once modified adjusted gross income exceeds $250,000 for joint filers. Required minimum distributions from pre-tax accounts can push income higher later in retirement, which is why some households spread Roth conversions over the years before those distributions begin.
Topics a written plan typically addresses
- The order of withdrawals among taxable, pre-tax and Roth accounts, and how it changes year to year.
- Whether partial Roth conversions in lower-income years could reduce future required distributions and surcharges.
- How capital gains from rebalancing a taxable portfolio affect Medicare premiums and the investment income tax.
- How charitable gifts from IRAs, where eligible, can meet giving goals without adding to income.
- How inflation and health care costs, the two largest stress sources in the survey, are built into spending projections.
These choices depend on each household's accounts, health and goals, and are commonly reviewed annually with a CPA or financial planner.
What to watch
Medicare premium brackets and tax thresholds are adjusted periodically, and Medicare typically uses income from an earlier tax year to set current premiums, so decisions made this year can affect costs later. Cerulli's finding that plans are linked with lower stress may push more advisory firms to make written retirement income planning a standard part of their service.
Sources
- First reported Retirees with Financial Plans Report Lower Stress — Cerulli Associates
- 2026 Medicare Parts A & B Premiums and Deductibles — Centers for Medicare & Medicaid Services
- Topic no. 559, Net investment income tax — IRS
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