Social Security and Supplement Security Income (SSI) benefits will rise 2.5 percent for nearly 73 million Americans in 2025. This annual cost-of-living adjustment (COLA) translates to an average of $50 in additional monthly benefits.
The annual COLA is tied to the Consumer Price Index (CPI), as determined by the Department of Labor’s Bureau of Labor Statistics. The latest increase is on par with those of the past 20 years. However, it is small compared to the most recent adjustments of 3.2 percent in 2024 and 8.7 percent in 2023. Regardless of the amount of these adjustments, Social Security benefits alone are insufficient for most individuals to afford the rising costs of aging or the perpetual care of family members with disabilities or special needs. Estate planning is the key to helping you prepare for these future expenses in the most tax-efficient manner.
For example, allocating savings to a tax-advantaged 401(k) plan or individual retirement account (IRA) can help prepare your finances to last through your golden years. You may also consider investing in an insurance policy that provides a death benefit to help your surviving family members maintain their lifestyles in the event of your passing, or you may fund any of several types of trusts that also provide asset protection from creditors and legal judgments. Finally, if you have a child with disabilities or who requires unique care, a special needs trust can provide them with financial assistance from you without jeopardizing their eligibility for public assistance.
It is important for individuals to regularly review their personal “my Social Security” accounts at www.ssa.gov/myaccount and work with their financial advisors to develop and implement comprehensive estate plans to help preserve wealth and afford the lifestyles they desire for the future.
About the Author: Lee F. Hediger is a co-founding director with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC. He can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or info@provwealth.com.
Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.
Lee F. Hediger is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.
This material is being provided for information purposes only and is not a complete description or a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the preceding material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.
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Posted on November 6, 2024