Social Security COLA Increase Estimate Announced for 2025

Intro hey some social security news just announced we're going to talk about it on today's episode what's 2025 going to look in terms of cost of living increases well we've got an early estimate from this announcement so let's dive in and break it down let us help you reach your peak in retirement it's time for your retirement elevated your retirement elevated Walter storeold here back with you alongside Scott Dugan and great episode on the way today Scott a little bit of news that we get to cover here regarding Social Security and I would imagine anytime this comes up it perks up the ears of your clients people want to know are we gonna get an increase if so how big is it gonna be we're gonna unveil the latest estimate just came out this morning and give you guys some insight on a few other interesting topics when it comes to spending power so we're excited about going through today yeah these things will dovetail together nicely well here was the headline that came out on various websites this one was specifically from CNBC but yeah Social Security cost of living adjustment maybe 2.6% in 2025 this is what the newest estimate has found so Scott’s reaction to the news what's your initial reaction to that increase Scott and and what is give us the behind the scenes sort of take here sure I I think this is appropriate uh you know if we and I know we're going to talk about some historical data uh but in line uh this is more historically kind of accurate for what we're we're used to uh we had a big bump uh a couple years ago and it's kind of tailed off as we tried to cool uh mon you know monetary policy and we've Tred to bring things back down to normal without crashing the economy and uh that that's the the game that they're playing right now so so 2.6 it sounds about right uh from a cost living standpoint now I know there's gonna few people that hear that and go well wait a minute the cost of living increase they've they've monkeyed with that and they don't include this don't include that and that's all true uh I'm just stating that from historical terms uh it shows that as we're look we're getting probably an interest rate cut you know coming up and that shows they're still trying to to bring things down uh Without Really imploding them so A 2.6 Social Security in it's in line with the direction we're headed yeah absolutely Historical data well you mentioned that historical data do you want to take a look at that put that in context for folks yeah 2.6 for 2025 is the estimate you know 3.2 in 2024 had that big 8.7 in 2023 and that 59 in 2022 you know what was the that was a reaction from massive government bailouts postco and so you saw real inflationary explosion and now that they tried to tighten the rains uh they're bringing it back in and so if you listened to or read our Market commentary recently you we felt like the FED missed the mark uh they probably should have cut rates earlier this year and we're a little undecided and we had this blip in the markets uh with you know what happened with Japan uh Japan came out and said hey we're raising interest rates all the way from zero up to 0.25 like well that's not that's not very big well that's the first move in 30 years wow and so really it's basically you were able to Japanese population able to borrow money you know and you spread it around the world so that is significant they're actually making a rate increase so you saw that Ripple through some soft numbers came came about so you saw the market pullback but really by the end of the week kind of erased that and and better numbers have happened earlier this week and so we'll see how how it plays out but again with this it's all over the m app and if you look at since 1976 to 2024 I believe our highest rate was 14.3 back in 1980 and followed up by 11.2 so uh those are the numbers and again it's just a slight cost of living increase what'll be interesting to see uh for the people that are on Medicare are there going to be adjustments to Medicare especially that part B uh premium uh they lowered a little bit last year are they going to give it to you one hand and take it out of the other we that we'll see when they give us the the further estimates later this year those are like when you uh you think taxes are going down but they're just increasing them in another area of your life uh income tax gone down but sales tax went up or something like that to offset it or gas tax they need Revenue they're gonna get it somewhere that's right absolutely so what's what is the timing of this Scott if this is just an estimate we're here in you know mid August as this information is coming out so what's the next like deadline and and and could it dramatically change from this estimate you think or do you think this will be kind of where we end up I mean I think they're they're letting this out and and factor in you know most of the the data they have right now now could you know curveball happen and they change dramatically any anything is possible but if they're letting this number out I think they're going to try to hit that number but time time will tell so it's any anybody's guess but I'd say it's gonna probably come in and hover around that number when they make the final determination all right well we will keep an eye on it make sure it doesn't change uh but when the official announcement comes out we'll do another episode and of course let you know about it here on the podcast and on YouTube uh don't forget to like And subscribe the channel by the way help support us and let more people know that you like the content of the video we're not done yet though so don't go anywhere um we know want to broaden Buying power nationally this conversation out just a little bit Scott you know when it comes to Social Security cost of living increases it always leads to this Brad broader discussion of buying power what is this really going to do to help me and you saw something on Instagram that kind of jumped out at you interest uh recently and kind of found interesting looking at buying power and let's talk a little bit about what that truly means but it had a kind of a state-by-state comparison of where you know the same dollar how kind of far that carries you I I I love this graphic it shows that I'm a nerd when it comes to to data sure hey this one's this one's a good one for the delay person though it's got color it's got big numbers it's good visually visually appealing so yeah yeah very very interesting and as soon as I saw this obviously being in Kansas City I was very proud to be near the top yeah U like there's only a few a handful of States Arkansas Mississippi Alabama Kentucky uh that have more purchasing power Oklahoma slightly ahead of us U but I'll take that $110 buying power in in the city right in the state of Kansas is pretty pretty good th this tells me that it's uh it's 10% easier to live in Missouri than the average you know what a100 any of these that would be just straight up $100 that would be sort of the Baseline normal living you guys got it 10% easier yeah I that's a great way to put it great way to put it where you know California's got it got it tough there at $88 of buying power I mean that I would have actually expected that to be even a little bit lower uh just given the housing prices in a lot of California that that would be tough yeah and you know what what are are factoring in they're looking at Cost of Living uh local taxes that's being factored into this cost of living you know so yeah real estate is going to be one of those things uh I would imagine if you look at uh example California they've got a you know they've lost population as so they're trying to figure some things out uh surprisingly Florida uh it is becoming more expensive to be there because of the flock of people yeah the the opposite problem caused a somewhat similar result in more lower buying power because so many people move there yes and and so an example they make a great comparison you know a $100 is worth 26% Less in California than in Arkansas okay Arkansas has the highest uh arkon Mississippi for example so again some people say well I would rather live in California than Arkansas the other hand Arkansas has become the mountain biking one of the mountain bik capitals of the world and huge influx of of people going to college there and they're they big marketing campaign to make it more of a destination uh you look at Tennessee uh Tennessee is attracting a lot of businesses they've grown exponentially I would assume they probably were higher like if you went did this three to five years ago uh that number probably have been higher but you've got this influx I know I was in uh Nashville earlier this year yeah and from our hotel uh we up on a on a roof uh 17 large cranes around the city in big projects the last time I was in Nashville noticed the exact same thing it was like oh my gosh look at all the cranes it just it really stood out for some reason yeah it's really you can tell a lot about a major major metalon city if you go and look at the amount of cranes that are that are going up right now what they're building uh but it's so when people are looking for you know where are we going to retire uh example Florida a lot of people go there uh no state income tax I've got a client right now selling their home in Missouri they've got already have a second home in uh Cal or in Florida they're selling this home they're going to move live in that home become their their primary residents for a couple years and then sell that uh so no state income tax but depending where they are their hund $100 may not go as far yeah they're feel it in pocket in other ways yes and so again I the moral of the story is that this is affecting how far your dollar goes depending on where you live right so that's one factor when we're deciding where where we're going to settle or retire but any good plan that you put together it's got to account for inflation and taxes over time and if you watch previous episodes of the of the podcast we've talked about you know when people retire their expenditures you know the cash flow for the usually the first 10 years of retirement let's say 65 to 75 that's going to be the highest it's probably going to increase potentially slightly over that time it it doesn't do this unless we have crazy crazy spending most time that first 10 years it does this and then as we bark in the next 10 years it slightly goes down and then the Final Chapter it can go down even more barring health care which can make that hockey stick back up towards the end of life uh so I think it's crucial really those first 10 years of retirement really figuring out what it's going to cost for those first 10 years to do everything that you want to do go through an exercise to make sure your portfolio and your plan is situated such that it can generate that cash flow that it's needed in the most efficient with as little risk as possible to make sure that that first decade which is probably going to be your most active is without worry so you can sleep all at night and really make the most out of that that first 10 years is your retirement Journey truly tailored to your needs in his book exceptional retirement tools and strategies for retiring on your own terms Scott Dugan addresses The crucial questions all retirees ask discover the power of a clear Financial decision-making process that can prevent major retirement mistakes and unlock exceptional opportunities in the book Scott outlines four essential questions that guide retirees towards successful outcomes don't miss out on key insights that could Define your future available now on Amazon click the link in the description of this episode to get your copy of exceptional retirement yeah I think it's a great Point Scott you know How it impacts spending we uh we're hitting the 2-year anniversary of when uh my wife and I moved from North Carolina to Colorado so we went from the 106 to the 98 in that exchange and it's interesting I being a remote business owner didn't experience any of the difference in terms of you know what you're earning because that I could live anywhere and it's going to be about you know the same because I'm not beholden to that Connie has seen an increase in her salary so that was nice to go along with this yes maybe an increase cost of living but increase in salary um out here compared to what we were getting in North Carolina on her end of things but yeah I noticed the difference in cost of living being greater it's way more expensive to go out to eat here just as one example like there's just and I know that's the everything's across the board gone up but like I noticed the difference from one state to another for just a casual let's just go pick up some food like the $10 option just doesn't exist anymore so like anytime you go out to eat it's going to be a little bit more of a serious like there's just not any of those like lower tier options here that we had access to in Carolina so that's one area because we eat out a lot that we have felt the pinch quite a bit oh yeah and I think we you see uh food either restaurants grocery store that's where you can see the largest increase you know gas pump you know we're seeing more expensive gas out here so that's another so yeah you definitely have higher you know higher gas prices out there yeah so again it's going to be situational uh you know the good thing about like most people their largest expense is going to be their mortgage for example that's not going to increase but your insurance uh has probably gone up whether it's your homeowners insurance your car insurance health insurance so that's where you see the the impact of things and so it will be interesting to Looking ahead see like how these play out and then if if we do if they are able to continue to load lower interest rates to stimulate the economy uh to stimulate the markets it be interesting to see what that effect is uh but that's going to be largely driven by reactions and also policy you know we're we're looking at election year and it's shaping up as we talked earlier uh very contentious uh we've already had a few curve balls uh thrown coule just a couple uh but it is amazing how quickly we just roll right to the next thing and you know we did see some volatility in the markets you know in the last week or so 10 days but it really wasn't that large of a move it's just been things have been so steady uh that it was a kind of a blip or a shock so I think people kind of perked up a little bit go oh wait wait yeah the market market does go go down swiftly uh but also it comes comes back quickly so it comes to make sure we've got a good smart investment discipline always make sure we've got a smart place to take money from uh when we need it we do not want to be emotional and have a knee-jerk reaction you know just because China raised her interest rates or and Buffett sold as Apple stock we've had some numbers that came in that were a little soft that that getting that data we don't use that data to make knee-jerk reactions because if we would have panicked and said oh my God gosh this is the beginning of the end and God for somebody went to cash within a few days it erased most of that loss and I'm not saying it's not going to be volatile August August going in end of August September October are traditionally very very volatile months so I think we're going to be in for more of it but I that's a natural progression and it happens almost every year in September October very good Scott great breakdown today I appreciate your perspective on not only the Social Security piece but it's these kinds of conversations I think that folks need to be having with a financial advisor especially as you're getting ready for retirement you need an adviser that's talking to you about things like buying power and how are we going to plan your legacy for the future and the Next Generation it's got to be about more than just what stocks and bonds do you want in your portfolio and that's what I love about you guys you bring so much more to the table that I think the average adviser just isn't playing in that field and you guys are making sure that no ST is left unturned and really doing comprehensive planning for folks and so I think today's conversation is just a slice of the depth that you go to uh when you're talking to folks about how to think about their finances and retirement planning ultimately it's making sure that whatever your ideal Vision retirement is we need to help that help you make that come true and that's what good proper planning does is keeps you on the path to make sure you experience more of what you want very good hey do you have any questions for Scott if you do here's a few ways that you can ask them we'll put contact information up on the screen and down in the description of today's show but you can always go to listen to scott.com we've got great resources and past episodes for you on the website you can also call 913393 4724 to reach the office directly no matter where you are you can work with Scott Dugan the your retirement elevated team uh he is the co-founder and managing partner of elevated Retirement Group based in KC in the metro area but serving clients all across the country so again wherever you are don't hesitate to reach out they can work with you from anywhere Scott thanks for the help this week we'll look forward to catching up with you on the next episode looking forward to it thanks Walter take care we'll see everybody next time right back here on your retirement [Music] elevated investment advisory services offered through elevated Capital Advisors LLC and SEC registered investment advisor