At The Lansky Law Firm, we believe that informed estate planning requires an awareness of key financial changes that could impact you and your loved ones. The Social Security Administration (SSA) recently announced the 2025 Cost of Living Adjustment (COLA), a development of particular importance for those receiving Social Security and Supplemental Security Income (SSI) benefits.
The COLA is a measure designed to preserve purchasing power as inflation fluctuates, helping Social Security benefits keep pace with rising costs. This adjustment can be essential for sustaining the financial security of retirees and their families.
What’s New for 2025?
For 2025, Social Security recipients will see a 2.5% increase in benefits, translating to an average monthly rise of approximately $50. While this year’s COLA is less than the 3.2% adjustment in 2024 and considerably lower than the 8.7% increase in 2023, a smaller adjustment can signal easing inflation—a valuable insight for long-term financial planning.
Key Financial Changes Impacting Your Estate Plan
As you consider your estate planning strategy, these adjustments and other updates can be critical to your financial decisions. Here’s an overview of the key changes:
Medicare Part B Premiums Beginning in 2025, Medicare Part B premiums will rise from $174.70 to $185.00 per month. This increase in healthcare costs could influence your budgeting and healthcare planning as part of your estate strategy.
Medicare Part D Out-of-Pocket Maximum Medicare Part D, which covers prescription drug costs, will introduce a new out-of-pocket maximum of $2,000. Once you reach this threshold, Medicare will cover additional prescription costs. This cap provides more certainty around medication expenses, potentially reducing financial burdens for retirees with significant healthcare needs.
Social Security Tax Cap In 2025, the maximum earnings subject to Social Security tax will rise to $176,100, up from $168,600 in 2024. For higher-income beneficiaries, this could have implications for retirement contributions and estate taxes. As you plan for wealth distribution, this adjustment may play a role in determining tax strategies.
How These Updates May Impact Your Estate Planning
Factoring in these financial adjustments can be essential to managing resources, preparing for healthcare costs, and planning for long-term financial security. A well-rounded estate plan considers both inflationary pressures and income fluctuations, helping you optimize investments and allocate assets in a way that sustains financial stability for you and your beneficiaries.
Whether you are adjusting your financial strategy, preparing for healthcare costs, or evaluating investment options, we’re here to help you navigate these changes. The Lansky Law Firm is committed to ensuring your estate plan aligns with the latest financial updates, providing security and peace of mind for the future.
Consult with us today to discuss how these adjustments might influence your estate planning and guide your approach to long-term financial wellness for you and your loved ones.
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