Important retirement planning changes are coming in 2025.

To help you prepare and take action, I've summarized the most applicable changes in today's email.

I've also compiled a 2-page PDF cheatsheet (updated for 2025!) with every important retirement & tax planning number you'll likely need.

👉 Grab it here.

Before we dive in, did you catch this week's podcast?

Fixing the Housing Market, Trump's Tariffs, and More! How do we fix the housing affordability problem in the U.S.? Will lower interest rates really improve the real estate market? What are the benefits/drawbacks of tariffs? Listen Now →

Contribution Limits for Retirement & Health Savings Accounts:

For employer plans, if you wish to maximize your contributions while spreading them evenly throughout the year, be sure to increase your contributions to be effective with your first paycheck in January 2025.

Social Security Changes for 2025:

Following this year’s (2024) reasonable 3.2% Cost-of-Living-Adjustment (COLA), Social Security announced that the COLA for 2025 will be even less exciting at 2.5%.

While prices continue to rise, albeit more slowly (we shouldn’t expect prices to decline), this inflation adjustment reflects the fact that general inflation is back to its historical norm.

If you’re interested in seeing all previous COLA amounts since 1975, you can click here.

For those who are still working, the income subject to Social Security taxes in 2025 will increase to $176,100, up from $168,600 in 2024.

Medicare Premiums to Increase:

In 2025, the monthly Medicare Part B premium will increase by $10.30 to $185.00.

Additionally, the first IRMAA surcharge (Income-Related Monthly Adjustment Amount) will now occur at modified adjusted income levels of $106,000 for single filers and $212,000 for joint filers.

These income amounts are based on your 2023 tax filing since Medicare looks back two years for IRMAA purposes.

This is one of the many "phantom taxes" we strive to help our clients avoid through proactive annual tax planning.

» Looking to hire a retirement & tax planning expert in 2025? Click here to learn more about how our team can help.

Gift-Tax Exclusion Amount to Increase:

The annual gift-tax exclusion amount is increasing by $1,000 to $19,000 per person per year for 2025.

This means that next year, you can give a child (or anyone else) $19,000 without reporting your gift to the IRS.

Additionally, using a process known as "gift splitting," your spouse can also give the same amount to the same person, allowing for a total gift of up to $38,000 without needing to report it to the IRS.

A Few Other Tax Notes and Changes:

To keep this note from getting too long, I’ll summarize a few other changes announced by the IRS:

• The Standard Deduction for 2025 will increase slightly to $30,000 for couples filing jointly and to $15,000 for single filers.
• The Qualified Charitable Distribution (QCD) allowance is increasing to $108,000 in 2025, up from $105,000 in 2024.
• The Federal Income Tax Thresholds are increasing by about 2.8% to reflect inflation increases.

Happy planning!

Stay wealthy,

Taylor Schulte, CFP®