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Upcoming Social Security Changes: What Northern Trust Employees Should Know for January 2025

Healthcare Provider Update: Healthcare Provider for Northern Trust Northern Trust primarily collaborates with various healthcare insurance providers to offer benefits to its employees. One of the notable partners is Aetna, which provides a range of health insurance options including medical, dental, and vision plans tailored to meet the needs of its workforce. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are projected to surge significantly, largely influenced by a combination of rising medical expenses and the potential expiration of federal premium subsidies. Experts anticipate average premium hikes of approximately 20% or more, with some states facing increases exceeding 60%. This confluence of factors could result in out-of-pocket expenses for many consumers skyrocketing by over 75%, severely impacting access to affordable healthcare for millions of Americans. As the landscape shifts, proactive measures during 2025 will be crucial in mitigating these impending financial burdens. Click here to learn more

Social Security remains a pivotal topic in modern political discourse, with imminent changes poised to affect millions, including Northern Trust employees. As the program contemplates potential reforms, understanding the nuances of these upcoming adjustments is crucial. Post-2025, several significant alterations to Social Security are expected, impacting financial planning and stability.

Anticipating the Cost of Living Adjustment (COLA) for Northern Trust Employees

Initially, an annual Cost of Living Adjustment (COLA) is anticipated. The Social Security Administration (SSA) calculates COLA based on the Consumer Price Index (CPI) increases during the third quarter of each year. While the definitive COLA figures for 2025 won't be published until October 2024, current forecasts by the Senior Citizens League suggest a 2.6% increase. This moderate rise, still above the Federal Reserve's long-term inflation target of 2%, could enhance the purchasing power of Social Security benefits, offering Northern Trust employees some solace after the higher inflation rates that began in 2021.

Full Retirement Age Changes Impacting Northern Trust Employees

Another significant shift is the gradual increase in the full retirement age. Established by a Congressional Act in 1983, the full retirement age is progressively extending to 67. For those born in 1954, the full retirement age was 66. However, this threshold increases by two months each year for individuals born after 1954. By 2025, those born in 1958 will reach their full retirement age at 66 and 8 months, while those born at the start of 1959 will reach 66 and 10 months. Northern Trust employees need to be aware that this measure directly impacts the calculation of monthly benefits, whether claimed at full retirement age or deferred until age 70.

Social Security Contribution Adjustments for Northern Trust Employees

Additionally, changes to Social Security contributions are on the agenda. Typically, individuals contribute 6.2% of their wages to Social Security, matched by their employer for a total of 12.4%. However, there's a cap on taxable income, adjusted annually based on wage inflation. For 2024, this cap was set at $168,600, with any income above this limit exempt from Social Security taxes. Projections for the coming year, aligned with COLA adjustments, suggest a slight increase in this cap due to lower inflation rates, potentially leading to higher tax burdens for high-income earners at Northern Trust.

Strategic Planning for Northern Trust Employees Nearing Retirement

While these changes predominantly impact those nearing or already at retirement age, they are also relevant for active Northern Trust employees, affecting their future benefits and tax liabilities. Often, many are not fully aware of potential enhancements to their Social Security income. For instance, certain strategies could significantly increase annual retirement income. This opportunity highlights the importance of informed planning and engaging with available resources to effectively maximize Social Security benefits.

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Staying Informed on Social Security Adjustments

As the Social Security landscape evolves each year, staying informed and proactive in analyzing these changes is vital to optimize financial planning. The adjustments slated for 2025 underscore the dynamics of this essential program and the need for meticulous preparation to ensure a stable and comfortable retirement for Northern Trust employees.

Income Limits and Working While Receiving Social Security Benefits

In addition to the anticipated adjustments, beneficiaries should be aware of modifications to Social Security's income limits. For those continuing to work while receiving benefits before reaching full retirement age, the earnings test limit is expected to increase in 2025. This adjustment allows Northern Trust employees to earn more through their work without losing Social Security benefits, offering greater flexibility and financial comfort during the transition to full retirement. According to the 2024 Social Security Administration Fact Sheet, this adaptation aims to accommodate economic changes and support retirees' engagement in the workforce.

Observing the forthcoming Social Security changes for 2025 is akin to preparing for a seasonal transition in gardening. Just as a gardener anticipates the first frost and modifies their planting schedule, Northern Trust employees nearing retirement need to adjust their financial plans. The forecasted cost of living adjustment (COLA) resembles the slow release of essential nutrients needed for plants' survival amid temperature fluctuations, thus providing necessary aid to retirees' budgets. Simultaneously, the gradual increase in full retirement age reflects the practice of planting perennials, which require time to reach their full bloom. Lastly, the adjustment of the tax ceiling is similar to pruning—ensuring one does not remove too much from their earned income, thus promoting better financial health upon retirement. Just as gardeners prepare their tools and knowledge for the upcoming season, it's crucial for Northern Trust employees gearing up for retirement to equip themselves with information to optimize their benefits.

What is the 401(k) plan offered by Northern Trust?

The 401(k) plan at Northern Trust is a retirement savings plan that allows employees to contribute a portion of their salary on a pre-tax basis, which can grow tax-deferred until withdrawal.

How does Northern Trust match employee contributions to the 401(k) plan?

Northern Trust offers a matching contribution to the 401(k) plan, which typically matches a percentage of the employee's contributions, up to a certain limit.

Can employees at Northern Trust choose their investment options within the 401(k) plan?

Yes, employees at Northern Trust can select from a variety of investment options within the 401(k) plan to tailor their retirement savings according to their risk tolerance and financial goals.

What is the vesting schedule for Northern Trust's 401(k) matching contributions?

The vesting schedule for Northern Trust's 401(k) matching contributions typically follows a graded vesting model, where employees earn ownership of the matching contributions over a specified period.

At what age can employees at Northern Trust start withdrawing from their 401(k) plan?

Employees at Northern Trust can generally begin withdrawing from their 401(k) plan without penalties at age 59½, although they may also access funds earlier under certain circumstances.

Does Northern Trust offer a loan option against the 401(k) savings plan?

Yes, Northern Trust allows employees to take loans against their 401(k) savings plan, subject to specific terms and conditions outlined in the plan documents.

What should employees at Northern Trust do if they want to change their 401(k) contribution amount?

Employees at Northern Trust can change their 401(k) contribution amount by accessing the benefits portal or contacting the HR department for assistance.

Are there any fees associated with Northern Trust's 401(k) plan?

Yes, Northern Trust's 401(k) plan may have certain fees associated with investment options and plan administration, which are disclosed in the plan documents.

How often can employees at Northern Trust change their investment allocations in the 401(k) plan?

Employees at Northern Trust can typically change their investment allocations in the 401(k) plan at any time, subject to the plan's specific rules and guidelines.

What educational resources does Northern Trust provide for employees regarding the 401(k) plan?

Northern Trust offers various educational resources, including workshops, online tools, and one-on-one consultations, to help employees understand and maximize their 401(k) savings.