facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause

Blooming Insights - January 2025

Blooming Insights - January '25


A Snapshot of the Past, A Preview of the Future:  

Special Edition - 2024 Year-End Review, a Photo Collage, and 2025 Tax Insights! 

January 2025

Hanging out with us in the Plum Tree!


What an incredible year it has been – a look back at our year in review! 


2024 has been a year of remarkable growth and innovation for PlumTree Financial. As we celebrated our 10th anniversary, we introduced advanced solutions to enhance our services and further strengthened our reputation as a valued partner in guiding clients through their financial journeys. Each success has allowed us to empower our clients in pursuing their goals, making this a year filled with both achievement and enjoyment. We are deeply grateful to our clients, partners, and friends. 

 

PlumTree Financial had the privilege to partner with and support these amazing organizations and charities throughout 2024. 


Tax Updates for 2025: What You Should Know! 


As we step into 2025, several key tax changes are poised to impact individuals and businesses alike. From increases in retirement contribution limits to adjustments in Social Security benefits and tax brackets, here is a comprehensive overview of the updates to help you plan ahead. 


Increased Contribution Limits for Retirement Accounts 


One of the standout updates for 2025 is the increase in contribution limits for retirement savings plans: 


  • 401(k), 403(b), and Similar Plans: The maximum employee contribution limit has risen to $23,500, up from $23,000 in 2024.  


  • For those aged 50 and older, the catch-up contribution limit remains $7,500, allowing a total potential contribution of $31,000
  • A special new catch-up contribution rule applies for participants aged 60 to 63. For 2025, these individuals can contribute an additional $11,250, bringing their total possible contribution to $34,750. This limit will be indexed for inflation in subsequent years. 


  • IRAs: The contribution limit for Individual Retirement Accounts (IRAs) remains $7,000, with an additional catch-up contribution of $1,000, also unchanged, for those aged 50 and older, bringing the total to $8,000


  • Cash Balance Retirement Plans and other Defined Benefit Plans: Employers sponsoring cash balance plans or other defined benefit plans may be able to make higher contributions in 2025. Effective, January 1, 2025, under Internal Revenue Code (I.R.C.) 415(b)(1)(A), the limitation on the annual benefit under a defined benefit plan increases to $280,000. Cash Balance plans are an attractive option for higher-income earners looking to accelerate their retirement savings. These plans are offered by employers.

 

These adjustments reflect cost-of-living changes and are designed to encourage greater retirement savings. 


Social Security Benefits See a Boost 


Social Security recipients will notice a significant increase in their benefits in 2025, thanks to an estimated 2.5% Cost-of-Living Adjustment (COLA).  


In addition, the Social Security taxable wage base has been raised to $176,100, up from $168,600 in 2024. This means higher earners will see more of their income subject to Social Security taxes. 


Changes to Tax Brackets and Standard Deductions

 

The IRS has adjusted tax brackets and standard deductions for 2025 to account for inflation.  


Here are the revised brackets for individual filers



  • 10%: Up to $11,925 individual (up from $11,600) 
  • 12%: $11,925 to $48,475 (up from $11,600 to $47,150) 
  • 22%: $48,475 to $103,350 (up from $47,150 to $100,525) 
  • 24%: $103,350 to $197,300 (up from $100,525 to $191,150) 
  • 32%: $197,300 to $250,525 (up from $191,150 to $243,725) 
  • 35%: $250,525 to $626,350 (up from $243,725 to $609,350) 
  • 37%: Over $626,350 (up from $609,350) 

 

Here are the revised brackets for married couples filing jointly


  • 10%: Up to $23,850 (up from $23,200) 
  • 12%: $23,850 to $96,950 (up from $23,200 to $94,300) 
  • 22%: $96,950 to $206,700 (up from $94,300 to $201,050) 
  • 24%: $206,700 to $394,600 (up from $201,050 to $383,900) 
  • 32%: $394,600 to $501,050 (up from $383,900 to $487,450) 
  • 35%: $501,050 to $751,600 (up from $487,450 to $731,200) 
  • 37%: Over $751,600 (up from $731,200) 

 

The standard deduction has also increased: 


  • Single Filers: $15,000 (up from $14,600) 
  • Married filing jointly: $30,000 (up from $29,200) 

 

Health Savings Accounts (HSAs) Get a Boost 


HSA contribution limits have increased as well: 


  • Self-only coverage: $4,300 (up from $4,150) 
  • Family coverage: $8,550 (up from $8,300) 
  • Catch-up contribution (age 55 and older): $1,000 (unchanged) 

 

Key Takeaways 


These tax updates reflect the government’s efforts to adjust for inflation and provide greater opportunities for savings and financial planning. To make the most of these changes, consider: 

  1. Maximizing Retirement Contributions: Take advantage of higher limits to bolster your retirement savings. 
  2. Reviewing Withholdings and Tax Strategies: Ensure your withholdings align with the new tax brackets to avoid surprises at tax time. 
  3. Exploring Tax Credits: Check your eligibility for expanded credits to reduce your tax liability. 
  4. Planning for Social Security Changes: Higher taxable wage bases and benefits may affect your financial strategy. 

 

Stay informed and consult with a tax professional to optimize your financial decisions for 2025. By understanding these updates, you can better navigate the evolving tax landscape and secure a stronger financial future. 


What’s Next? 


PlumTree Financial is committed to helping you navigate the political and tax environment. The 2024 election represents a shift in power that could result in tax, spending and trade policies, to name a few. 


Potential changes could include reducing corporate tax rates to attract businesses, extending or making permanent provisions from the 2017 Tax Cuts and Jobs Act. These provisions could include the lowered individual tax brackets and the increased standard deduction. Additionally, proposals to repeal or reduce estate taxes and adjust capital gains tax rates are likely to surface. Republicans may also push for limits on certain tax credits and deductions to streamline the tax code. While these changes aim to reduce tax burdens, their implementation will depend on bipartisan negotiations and fiscal considerations.


PlumTree Financial stands ready to discuss how potential changes could impact you and we have adopted additional tools to help communicate risks and potential in your portfolio. We look forward to discussing this with clients this year.



Stay ahead in today’s fast-paced financial world! Follow us! 

Facebook   LinkedIn   X

Upcoming Events

January 8, 2025 | 12pm EST

LPL Research Market Outlook 2025

  • LPL Research discusses their economic and market forecasts for 2025.
REGISTER

February 4, 2025 | 12pm EST

Student of the Market - Presented by BlackRock

  • The Markets: Where have they been? Where are they now? Where do we think they're going?
  • Please join us for another informative webinar with returning guest speaker, Mark Peterson, the author of the popular “Student of the Market” monthly publication that is distributed widely to advisors across the country.
REGISTER

March 15, 2025 | 9am - 12pm EST

PlumTree Financial's Shamrock Shred & Sip

  • Get ready to shred, sip, and celebrate St. Patrick's Day in style!
  • Join us for a day of shredding fun and drinks in the spirit of St Patrick’s Day! Securely destroy your unwanted personal documents in a Shred-it® mobile shredding truck.
RSVP

"For last year's words belong to last year's language 

And next year's words await another voice."  


T.S Elliott, poet, essayist, playwright, publisher, and banker 


Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.


References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.


Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.


All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.


All investing involves risk, including possible loss of principal.


US Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.


The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.


The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.


Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.

Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.  

 

All information is believed to be from reliable sources; however, PlumTree Financial makes no representation as to its completeness or accuracy.