Ep. 296 – 2025 – Important Financial Numbers in Retirement

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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.

Here’s the Full Transcript:

Radon Stancil

Welcome, everyone, to the Secure Your Retirement podcast. I cannot believe it—it is 2025! This is our first episode of the year, and we thought, what better way to open up the year than to review all kinds of numbers when it comes to deductibility, taxes, and all that good stuff? 

I will tell you right up front that we have this information in a printed document. 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. It contains all the numbers we’re going to review, but we’ll also talk through considerations verbally. Additionally, we’ll have a blog written on this topic, and you can request the document if you’d like. So, hold on until the end of the episode, and I’ll tell you exactly how to do it. 

Let’s jump right in! We’re going to talk a little bit about tax rates for 2025 and how they might have changed slightly from 2024. 

Radon Stancil

All right, so by the way, this document is one of the most important documents that sits on my desk all year. Anytime I get a question about tax brackets, contribution limits, or Medicare/IRMAA surcharges, I reference it regularly. It’s a collection of numbers we need to know to do proper planning. 

I’m going to start with tax rates for 2025. The tax rates themselves haven’t changed from 2024 to 2025. The lowest bracket remains 10%, followed by 12%, 22%, 24%, all the way up to 37%. Remember, our tax system in the U.S. is progressive, so people often misunderstand how brackets work. For example, if someone says, “I’m in the 22% bracket,” they might assume they pay 22% on all their income. That’s a common misconception. 

It’s a graduated system. Some money gets taxed at 10%, some at 12%, and so on. Understanding these brackets is crucial for making informed tax strategy decisions. The only real change in 2025 is the dollar amounts that correspond to these tax rates, which have been adjusted upward for inflation. For instance, in the 10% bracket, married couples filing jointly will pay 10% on income from $0 to $23,850. If you make more than $23,850, you’ll pay 12% on the next portion of your income, which now ranges from $23,851 to $96,950. 

In 2024, the top of the 12% bracket was around $94,000, so it’s increased by a couple of thousand dollars. Similarly, the 22% bracket tops out at $206,700 in 2025, compared to $201,000 in 2024. These adjustments help account for inflation. 

Radon Stancil

Next, let’s talk about long-term capital gains. If you sell an asset you’ve owned for over a year, such as property, stock, or a business, you qualify for long-term capital gains treatment, which comes with better rates than ordinary income. For married couples filing jointly, if your taxable income is below $96,700, you pay nothing on long-term capital gains. Between $96,701 and $600,000, the rate is 15%. For taxable income over $600,000, the rate jumps to 20%. 

For single filers, the thresholds are lower. If you make $48,000 or less, you pay no long-term capital gains tax. Income from $48,001 to $533,000 is taxed at 15%. Over $533,000, the rate is 20%. Being strategic about income and asset sales can help you manage your tax liability effectively. 

Now, let’s briefly touch on standard deductions. For 2025, the standard deduction for married couples filing jointly is $30,000, up from $29,200 in 2024. For single filers, it’s $15,000. There are additional deductions for those aged 65 or older or blind—$1,600 for married couples and $2,000 for single filers or heads of households. 

Regarding Social Security, there’s a cost-of-living adjustment (COLA) of 2.5% for 2025, effective January. This is a modest increase but helpful given the inflation we’ve experienced in recent years. 

For those wondering about full retirement age, it varies based on your birth year. For example: 

• Born in 1958: Full retirement age is 66 years and 8 months. 

• Born in 1959: Full retirement age is 66 years and 10 months. 

• Born in 1960 or later: Full retirement age is 67. 

Radon Stancil

If you start taking Social Security before your full retirement age, your benefits will be reduced, and your income will be capped at $23,400 in 2025 for earned income. Anything over that amount may reduce your benefits further. 

Finally, let’s discuss IRMAA (Income-Related Monthly Adjustment Amount) for Medicare. This applies to Part B and Part D premiums if your modified adjusted gross income exceeds certain thresholds. For married couples filing jointly, the IRMAA surcharge kicks in at $212,000 for 2025, up from $206,000 in 2024. The surcharge increases as income rises, so careful planning is essential to manage this additional cost. 

For 401(k) contributions in 2025: 

• The limit for individuals under age 50 is $23,500. 

• Those aged 50 and over can add a $7,500 catch-up contribution, for a total of $31,000. 

• From ages 60 to 63, there’s an ultra catch-up provision of $11,250, replacing the $7,500 catch-up. 

For IRAs, the contribution limit is $7,000, with an additional $1,000 catch-up for those over 50, for a total of $8,000. 

Lastly, required minimum distributions (RMDs) now apply starting at age 73. And for estate planning, the lifetime estate tax exemption is $13,990,000 per person in 2025.