In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss key updates to the important financial numbers for 2025 that impact tax planning, retirement contributions, and other critical aspects of financial planning. They explain how inflation adjustments have influenced tax brackets, 401(k) and IRA contribution limits, Medicare IRMAA thresholds, and more. Whether you're planning your retirement or already enjoying it, this episode is packed with insights to help you navigate 2025 with confidence and clarity.
Listen in to learn about the updated financial planning numbers that are essential for a secure retirement. Radon and Murs delve into tax brackets, Social Security adjustments, HSA limits, and strategies to make the most of these changes. You’ll gain actionable insights to optimize your financial decisions for the new year.
In this Episode, find out:
· The 2025 tax brackets and how inflation adjustments affect your tax planning.
· Updates to 401(k), IRA, and HSA contribution limits for retirement savings strategies.
· The latest changes to Social Security benefits, including COLA adjustments and taxation thresholds.
· Medicare IRMAA updates and how income levels impact your premiums.
· Key estate tax exemptions and what they mean for legacy planning.
Tweetable Quotes:
1. Radon Stancil: "Understanding your tax brackets is crucial for making good decisions around tax strategy and retirement planning."
2. Murs Tariq: "Small changes in financial numbers can have a big impact—staying informed helps you retire comfortably and securely."
Resources:
If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!
To access the course, simply visit POMWealth.net/podcast.
We've got a great episode for you today. We are talking about 2025 important numbers every year as we go into a new year. There is an adjustment or an update on tax brackets, contribution, eligibility, contribution limits. When it comes to 401Ks, IRAs, HSAs, all these different accounts that we fund into and rely on the funding for them for a successful retirement. These numbers move around a little bit just based off of inflation adjustments and things like that. So we're going to walk you through a document here that lays out all the different things that you need to know this year in 2025 to make good decisions and walk through 2025 in a nice manner. - Yeah, I think what's going to be really helpful is if you do have the document in front of you and you decide you would like to get it and you're listening to the episode, you can just kind of follow along. But if you just listen to the episode and then you just go get the document, it works out really well as well. We're going to tell you at the end of the episode exactly how to get this document if you want it. But before we get into this episode, we'd have a very quick disclosure. - The information contained in this podcast is intended to provide general information only and not to be considered individualized advice. Different types of investments carry different levels of risk, as always. Please contact your financial professional for advice appropriate to your situation. Enjoy the show. - Welcome to the Secure Your Retirement podcast. This is the place where high achieving professionals come to gain confidence on how to successfully navigate their transition into and life during retirement. There's no such thing as a passive retirement plan. To have a successful financial future, your plan must be actively managed. Each week, we will bring you action plans and expert interviews that will help you gain insights, learn fresh perspectives, and finally experience peace of mind about your retirement. Here to help you achieve your dream retirement and live the life you deserve are your hosts, certified financial planners, Raiden Stansel and Mersterique. - Welcome everyone to Secure Your Retirement podcast. Cannot believe it, it is here, 2025. This is our first episode of 2025. And we thought, what better way to open up the year than to review all kinds of numbers when it comes to deductibility, taxes, all that good stuff. I will tell you right up front that we have this in a printed document that if you want it, we will be able to get it to you at the end of the episode. I will walk you through exactly how to get this and it has all the numbers that we're gonna walk through, but we're gonna walk it through a little bit about things that we wanna think about and consider verbally. And then obviously we're gonna have our blog written on this, but then you can actually get this document if you would like to get it. So hold on and wait till the end of the episode, I'll tell you exactly how to do it. So let's jump right in and we're gonna talk a little bit about our tax rates for 2025 and how they might have changed us a little bit from 2024. - All right, so by the way, this document I will say is one of the most important documents that sits on my desk all year. Any time I get a question on where a tax bracket is or a contribution limit or Medicare Irma surcharges, I reference this document regularly 'cause it's a bunch of numbers that we have to know to do proper planning. So I'm gonna talk about the tax rates for 2025. The tax rate itself has not changed from 24 to 25. So the lowest bracket is the 10 and then we've got the 12, 22, 24 going all the way up to 37%. Remember our tax system in the US is a progressive tax. So a lot of times people say, oh, I'm in the 22% bracket, which means they assume that they paid 22% on all the dollars of income. And that's just I think misconception that happens quite a bit, it's graduated. So some of the money gets taxed at 10, then 12, then 22. So understanding brackets I think is very good. It's very conducive of making good decisions around tax strategy. The really the only thing that has changed on the actual tax brackets is the dollar amounts that puts you in those certain tax rates. And they've all gone up historically, they go up a little bit based off of inflation off. Obviously we've had some pretty high inflationary years over the last couple of years. So the dollar brackets have gone up a little bit. So for example, if you are in the 10% bracket from and this is married filing jointly, just to make it simple, we'll talk about married filing jointly, there is a separate bracket for single, which is referenced on this document, and we'll tell you how to get it. But for married filing jointly from zero to $23,850 of income on that, you're paying 10%. Let's say you make more than $23,850, so you pay 10 on that chunk of money, and then you now you are in the 12% bracket from $23,851 to $96,950. So I give you that specific number, $96,950 to give you an idea of how much that's changed in 2024, it was not $96,950 at the top of the 12, it was around 94,000. So it's gone up a couple of thousand dollars. The 22% bracket, just another example, the top end of the 22% bracket is 206,725. In 2024, the top end of the 22% was 201,000. So just to let you know that it has been adjusted for inflation here a little bit. So understanding your rates, I think, is gonna help you understand your tax picture and make some good tax decisions this year. - All right, our next topic here, we just thought would be important for us to talk through, is long-term capital gains. This is just something to keep in mind if I'm going to sell an asset that I've owned for longer than a year. So a long-term capital gain means I've owned this particular thing, that could be property, it could be a stock, it could be a business, anything that I've owned for more than one year, I get long-term capital gain treatment, which means I'm not in those brackets or rates that MERS just talked about, I get a little bit better rate there. So if my taxable income as a married filing jointly is less than 96,700, I actually don't pay anything on long-term capital gains. So if I were strategically thinking, and let's say that I don't know, just retired, and I've got an asset that I need to sell, and I wanna get the best tax treatment, maybe I take all of my income from after tax dollars, and I don't take any from an IRA, and I get my tax rate really low, so I could sell that stock or sell that property at the best tax rate. If I make though, between 96,700 and 600,000 of taxable income, I'm at that 15% bracket. So that, remember those numbers that MERS was just talking about, it's way, way better treatment. Then if I make over 600,000 period, my long-term capital gains gonna be 20, and this is federal taxes, I still could owe some state tax on there. A single person, they can make 48,000 or less, pay zero on their long-term capital gain, and then 48,000 roughly, all the way to 533,000, puts them in the 15% tax bracket. So just something to keep in mind, if I'm strategically thinking here at the beginning of the year, I'm gonna have an asset that I wanna sell, I might wanna think about how my income is gonna be playing out. - All right, I'm gonna touch very briefly on standard deductions. Standard deductions is the immediate deduction that you get off the top of your income, and provided that you're not itemizing. So last year, in 2024, for married filing jointly, the standard deduction was 29,200. This year, walking into 2025, our standard deduction for married filing jointly goes up to 30,000, so $800 higher on the deduction. On the single side, we're at 15,000 is our standard deduction for the single, and then there's additional, if you're age 65 or older or blind, there's additional deductions there. For married, it's 1,600 for unmarried or head of household, it's 2,000 as an additional deduction there. I'll touch on Social Security as well. Social Security, the big thing I think people are always curious about is, well, if I'm receiving Social Security benefits, did I get a raise here in 2025? And there is what's called a COLA, a cost of living adjustment, which is if there's inflation, usually we expect a COLA, and we all know we've been through some inflation here over the last couple of years. So effective in January for recipients, there's a two and a half percent COLA that will be coming down on Social Security recipients, so two and a half percent raise is the way you can look at it. And then you wanna touch on full retirement age 'cause that's also something I think that gets a little confusing in the Social Security space as well. - I hope that you are enjoying the show. By the way, if you are in or nearing retirement and are someone who wants to gain clarity on what questions you should be asking, learn what the biggest retirement myths are and identify what you could be doing to achieve peace of mind for your retirement, get started today by requesting your complimentary video course, four steps to secure your retirement. To access the course, simply visit pomwealth.net/podcast. If you're new here or you haven't done this yet, this is definitely the first step to get started in applying these principles to your life. So head over to pomwealth.net/podcast and check us out. - Yeah, no problem, did you mention earnings limit, by the way? - I did not. - Okay, so this will tie this together. So full retirement age, what is that? - Well, they have been progressively increasing it. So let me give you a couple of examples. If your birth year was 1958, your full retirement age is 66 and eight months. If it were 1959, it's 66 and 10 months. And then if you were born in 1960 or above, this is where we've capped out at this point, it's 67. So if you were born in 1960 or later, your full retirement age is 67, so why is that important? Well, if I start taking Social Security prior to that full retirement age, I'm gonna get a reduction in what I get from Social Security, but I'm also now going to have a maximum amount of money that I can make as income for that year. Now, this is not passive income like rental income or dividends off of a stock. This is like real 1099 W2 type money that I go and work and get it, so we call it earned income. Then I'm gonna be capped at $23,400 in the year 2025. Anything I make over that, they're gonna keep some of my Social Security and I won't be able to get it all within that year. So just keep that in mind, full retirement age, if you were born in 1960 or later, is 67. And then when we ever talk about full retirement age, that's why that is so important. And then one other thing to keep in mind, all in this Social Security type of topic is that I am going to get, I am gonna be taxed on a portion of my Social Security if I make more than, married filing jointly, $32,000 a year, or if I'm single, $25,000 a year. If I make less than that, I don't pay any taxes on Social Security. If I make more than that, then I've got two tables. The first one, if I make between $32,000 and $44,000, I'm gonna make, I'm gonna have to claim 50% of my Social Security as taxable. And then if I make more than $44,000 married filing jointly, I'm gonna have to 85% of my Social Security as tax. I'm not paying 85% tax. 85% of my Social Security is taxed. If I'm single, that's if I'm making more than $34,000. So for a lot of folks, they're gonna be paying taxes on their Social Security 'cause those numbers are so low. - All right, let's talk about something that again is, can I end up being a surprise to someone if we don't do proper planning, which is Medicare. It's this fun term called Irma. I don't know the exact letters. It's income related, some type of adjustment. And we'll do a specific podcast on this usually throughout the year to help people understand specifically what Irma is, but I look at it as almost, it's a penalty if you make too much money and they charge you a little bit additional on your part B and part D. So walking into 2025 for Medicare Irma, for your part B premium with no surcharges is $185 this year for 2025. Where you could start being concerned about, am I going to receive an Irma surcharge? What they do, so if we're in 2025, they look back at your income two years prior, so they'll be looking at your 2023 income. And then there's brackets around how much income you have and does that result in a surcharge on your part B and part D. So this is a table that's good for understanding, especially if we're running strategies like Roth conversions and all types of different withholding income strategies, distributions, all these things, you want to be very aware of where you're falling in the Medicare Irma brackets. For married filing jointly, as long as your taxable income is below that 212, this is your modified adjusted gross income is below 212,000, then you are not going to be subject to any type of Irma surcharges on your part B and part D. To give you a reference point last year in 2024, it was 206,000. If you're below that, then you're not subject to a part B or part D type of surcharge this year. It's gone up by 6,000, so it's 212,000 or less. Again, inflation adjusted just like our tax brackets are. Here's one example that if you were above the 212, well, what would I expect to pay an Irma surcharge is if you're between 212 and 266,000 as a married filing jointly on your modified adjusted gross income, your part B has an additional to the 185 and additional $74 per person per month. And then if you are in part D, it's an additional $13.70 per person per month. So that number goes in another bracket up to 185 additional on part B, 295 additional on part B. So it can start to add up on us if we're not properly prepared for avoiding or surcharges or in some cases being aware of them and still deciding to take them because it helps with the different strategy that we're running. So if you're running some types of tax strategies this year and you're not talking about it or your professional that you're working with is not paying attention to where your brackets fall, you definitely want to be aware of that as we're making decisions in 2025. - Okay, if you are still working and you participate in a 401(k), you want to make sure here at the beginning of the year, if you want to max fund your 401(k) that you know what those numbers are so that you can talk to your HR department and say, adjust my contributions. Here's the max limit that you can put in if you're under age 50, it's $23,500 a year that you can put into your 401(k) and it doesn't matter whether you're putting that in the Roth or the traditional side, that's the limit. Now your company could match you up and above that but $23,500 is your max. Now, there's a provision that if you're age 50 and over you can do a catch up and that catch up is 7,500. So that's in addition to the $23,500. And then what we've got is we've got this little period between ages 60 and 63 that somebody can do an ultra catch up and that number this year is 11,250. Now that is not in addition to the 7,500 but it just raises your catch up from the 7,500 to 11,250. - All right, let's talk about, so that was 401(k), 403(b), 457, employer plan type of contribution limits. We also have just a simple traditional IRAs and the Roth IRAs. Those are subject to limitations as well. For 2025 on the IRA, either traditional or Roth, we can put in up to 7,000 for the year. If we are above the age of 50, then we can do an additional $1,000. So if you're above the age of 50 and you want to make any or eligible for a Roth contribution, you can do up to 8,000. And if you're eligible for a traditional, you can do up to 8,000, maybe get some tax benefit from it as well, which leads into tax deductibility on the traditional IRA. I work with your professional, your tax professional on this to help understand, am I getting a deduction if I put money into my traditional IRA? There are phase outs, there are brackets, just like there are other brackets in our tax system. So you want to make sure that we're understanding those and actually getting the true tax benefit out of contributing to these plans. What else we got, Raiden? - Yeah, so basically just a couple of little mentions and then we're done with this. One, required minimum distributions. Pretty much, if you're turning 73, you're going to have requirement of distributions. If you're over 73, you've already been taking required minimum distributions. And so you want to make sure you talk to your advisor and say, do I have them? How much am I going to take? And we're talking about money that needs to be taken out of a traditional 401(k) or IRA, and that begins. That is all called required minimum distributions. One, a couple of final topics. If you've ever wondered, well, wait a minute, should I be doing any kind of special things with my estate plan so that my kids don't have estate taxes? Well, they're now, the lifetime exemption is 13,990,000. That is per person. So we have a lot of room there right now not to have to worry about a state tax if you are under that. And then the final thing is, if you are taking advantage of a health savings account, an individual starting this year can put in $4,300 into their HSA. If you're a family with an HSA, you can put in $8,550. And then if you're over 55, you can put an additional 1,000 in there. So these are just a bunch of numbers. We know that it's a lot, but if you'd like to get it all, have it right in front of you, you can reach out to us. Easiest way to do it is to email us at info@pomwealth.net. And we will email you right back with this breakdown that you can have right in front of you, makes it super easy, super simple. Or you can call the office and you can ask for it and we're happy to provide that as well. If you would like to have a conversation with us, you can go to the top right-hand corner of the website, which is pomwealth.net, click on schedule call. Our calendar comes right up and we would love to be able to answer any questions that you might have. We hope this has been helpful. Thank you very much for listening. We'll talk to you again next Monday. - All right everyone, that wraps up today's episode of the Secure Your Retirement podcast. If you found value in today's episode, we would love nothing more than for you to head on over to iTunes and give us five star rating and a review. Be sure to take a screenshot of the review before you submit it and we'll send you a special gift. Our book, Get Off the Retirement Roller Coaster. Just email morgan@pomwealth.net with a screenshot of the review to get your gift. Also, be sure to subscribe so you get notified of new episodes as they're released every week. And finally, please share our podcast with your favorite social network, so more of your friends and family can benefit from this information. Always remember, you've worked hard to get where you are, and now you deserve to have a retirement that works hard for you. (upbeat music) (upbeat music) (upbeat music) You [BLANK_AUDIO]
