Security news, the COLA is up 2.5% for 2025 But Medicare Part B is jumping almost 5.9%. The cost of living adjustment reflects a steady decline in inflation. The 2.5% increase means that most retirees will see an extra 50 bucks in their social security payment up to 1976 starting in January. Does this cola affect when we should claim our benefits?

Yeah? Erin, the short answer is, no, it should not. Yeah. And just like with anything this is you, we want to return. We want to remove those short term blinders. And that's what this cost of living increase is when it comes to claiming your social social security benefits. We have to have a much broader picture, and we have to look at several different types of things, first, your income plan and your ability to maximize and have an efficient and predictable income stream for your lifetime, the other things we want to look at is your health, your taxes, your spousal benefits, and all of that plays the role of claiming Social Security, not a two and a half percent cost of living adjustment. Meanwhile, again, Medicare Part B is going to jump to 185 a month, up from 174 70 this premium usually comes straight out of our social security checks. How do we prepare for that change?

Yeah, so it's robbing Peter to pay Paul. We're going to give you a two and a half percent cost of living adjustment. But like all insurance, insurance is way outpacing inflation. Medicare up against 6% and with Medicare premiums coming out of your paycheck or your social security check, you're going to see that two and a half percent cost of living adjustment decrease. So with anything, with any inflationary period, you need to make an adjustment in your income plan for this whether that's, you know, just simply saying, Hey, we're going to take out more money that we've already planned for in the future, or we're going to offset some of our other spending to pay for the Medicare, which we hope isn't the scenario, but for some unfortunately, it's going to be.

How will this cola affect the taxes that we pay on our social security benefit?

Well, you know, I would probably say the government's using the old advisor who doesn't pay attention to taxes, adage of, hey, we made more money, so you're gonna pay more taxes. That's what's gonna happen. You know, the cost of living adjustment. Remember, Social Security is taxed on provisional income. The provisional income bands have not changed for as long as I've been doing this for well over a decade. So if you're a single filer, you're gonna pay 85% of your Social Security taxes. Me subject to taxation for any provisional income over 34,000 as a married filer, that's $44,000 so that means that half of your Social Security benefit, which is now gone up because of the cost of living adjustment and various sources of income, municipal bonds, capital gains, pensions, IRAs. So let's say, in this example, your social security you know, your benefit was $50,000 a year for Social Security benefits now with the cost of living adjustments, just for a hypothetical. Now, let's say you're up to $55,000 a year. Well, you're now going to be taxed on 85% is going to be subject to that $55,000 a year new income stream if your provisional income is over 44,000 so yes, you got a cost of living. Yes, part of that cost of living is going to go towards Medicare premiums. And yes, some of that cost of living is going to be paid back to the government with taxes. 75% of people, 50 plus worry Social Security will run out in their lifetime, and 61% say it's a major source of their retirement income. How do we prepare for the inevitable changes that will have to happen to keep the program solvent?

You simply have to have a plan. And you know, I think that's the big word in your question was, prepare. Start preparing. Now. The Social Security has been telling us for for well over a decade that there's going to have to be adjustments made to this. So you need to ask yourself, how are you prepared for those adjustments? Are you burying your head in the sand and saying, well, we'll just get to it when we get to it. Or are you saying, if we have a reduction in benefits in 2020 31 or 2034 you know that, that those years keep on bouncing around, what is our plan? Where are we going? What are we going to do? Are we going to have the income to supplement it? Are we going to have the assets to supplement it? Or are we going to have to reduce your lifestyle now, the key word is, if you don't prepare for this, it's going to be the latter, and we don't want that. So have start preparing now. You have time start preparing now for the the reduction that you know is inevitably we're being told is going to happen in terms of the solvency, many experts still stick by their guns that for the boomers, Social Security will be around, it's just going to look a lot different, right? Well, you know, I'm just glad we got to talk this through John, because clearly, yes, preparation, proactive planning, that's what's key here. So if somebody would like to talk through Social Security claiming strategies and the cola, I know we have great resources on your YouTube page, how else can they reach out to you with questions? Yeah, visit our website, www.gosecurus.com, on there, we have a host of podcasts and videos talking about Social Security, Medicare, taxes, everything that can help you start to understand what you need to plan for. And while you're on the website, you can visit the contact us tab, where you can schedule a 20 minute phone call, where we'll answer any general questions about these topics, or you can schedule a complimentary vision and clarity, consultation, or if you like doing things the old fashioned way gives call it the office 858-758-9889. And they'll get on my schedule. Great, John. Thank you.

Thank you, Erin.