For investors, the real issue is—as it always is—taxes. Everyone's waiting for Congress to act on taxes. Political drama makes for great entertainment, but investors shouldn't wait for the next act.

With taxes, the time to evaluate a client's situation for tax efficiency and recommend the next-best moves is always now. And, with inflation, there are a few distinct advantages and disadvantages for investors.
• Wage earners will see a bump up in their take-home pay. That's because federal tax withholding tables for 2022 used an inflation factor of just about 3%.

• Retirement savers can benefit from inflation adjustments that increase their investment limits in tax-advantaged accounts like 401(k)s, individual retirement accounts (IRAs), and Roth IRAs.

• Those collecting Social Security will get a cost-of-living increase this year of 5.9%—the most since 1982.

Prudent Advice For Clients Contemplating Retirement
The pandemic and aging baby boomers who once scoffed at WIN buttons have led to a record number of retirements—and those numbers will accelerate. The best advice:
• To anyone who hasn't retired yet: Wait.

• Retirees (for whom this is an option) should think about getting back into the hot job market. 

• To anyone who is contemplating filing for Social Security, they shouldn't.

Anyone who retires early may forfeit their peak earning (and saving) years. Plus, they'll be retired longer—very possibly 30+ years. Inflation threatens to turn their nest eggs into Humpty Dumpty. And investing conservatively to protect their assets—as most do in retirement—won't spare them if inflation becomes a permanent fixture.

People continue to make bad choices about filing for Social Security. Early retirements are sending more people to file. They're making a big mistake. They will miss out on the 8% annual bonus the government pays those who wait to age 70, and they'll lose the boost in benefits the 5.9% COLA increase for 2022 would buy them.

WIN Didn't Work. But Tax-Efficient Investing Does.
If inflation becomes a fixture, it will effectively increase tax rates no matter what the government does.