Social Security Cost of Living Adjustment - Pete Nicholson | First National Wealth Management

[Music] hello my name is Pete Nicholson I'm the chief fuer officer with First National wealth management today we're going to talk about the social security cost of living adjustment for 2025 what that may look like we'll talk about the timing of Social Security and what the future holds for Social Security the Social Security cost of living adjustment also known as Cola COA is an additional amount that's added to your annual Social Security payment it's designed to basically keep Pace with the cost of living the the basis for the adjustment is really occurs around the fourth quarter of every year around October and is based on the Consumer Price Index for clerical and urban workers basically the CPI W the anticipated cost of living adjustment for 2025 is expected to be in the two and a half to 2.6% range and these numbers continue to fall as the the monthly inflation report from the government continues to fall as well just to put this in historical perspective the adjustment for last year was about 3.3% and two years ago the Social Security adjustment was about 8% so inflation continues to fall but the reality is many consumers are still feeling pinched by elevated consumer prices elevated consumer services prices as well in addition the goods that we use every day grocery stores prices gas prices medical insurance and even Education costs continue to climb so many feel that Social Security adjustments are not really helping them outpace the the real cost of living it's important to engage a financial planner as early as you can just just to make sure you have a solid financial plan in place and the the financial planner can assist you in in taking a a dynamic approach to retirement withdrawals and as the retiree you may need to utilize other sources available to you like other other Nest type accounts like IAS and taxable accounts to to fill the gaps here are some other considerations it's a great time to review your Equity or stock exposure just to make sure you have enough in that area of your of your nest egg equities are one of the few asset classes that have actually outpaced the cost of living over a longer period of time also you want to make sure you're maximizing your investment potential by utilizing all the other vehicles available to you like different Ira types traditional Roth IRAs employer sponsor Vehicles like 401ks 403bs and other employer sponsor plans and if you if you if you're holding Target date funds within your employer sponsor plans be cognizant of how much Equity exposure you're actually holding in those th those are by Design are are meant to be more conservative as you AG so and remember that fixed income and cash assets that are that are meant to be relatively conservative and income producing have not done a good job at outpacing the cost of living so M make sure you have an asset allocation in your portfolio that works for you with with these funds and be cognizant of the equity exposure and be sure engage a financial plan early just just to make sure you're in the best financial plan possible [Music]