<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=314834185700910&amp;ev=PageView&amp;noscript=1">

New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Learn More

Enhancing Retirement Strategy for WeWork Employees: 2025 Social Security COLA Insights

image-table

For WeWork employees nearing retirement, navigating the economic landscape is essential for maintaining financial health. The annual Social Security Cost-of-Living Adjustment (COLA), a significant factor in this dynamic, is set to increase by 2.5% for the coming year, reflecting more moderate inflation trends compared to recent years.

Understanding the 2025 COLA for WeWork Employees

Originally established in the 1970s to address hyperinflation,  the COLA is designed to adjust Social Security  benefits in line with cost-of-living increases, offering retirees a measure of stability. This adjustment is linked to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which saw a 2.2% rise through September 2024, forming the basis for next year’s COLA determination.

While an increase in Social Security benefits is beneficial, it’s important for retirees, including those from WeWork, to understand potential tax implications. Higher Social Security benefits can lead to increased combined income, which may affect taxes due to the inclusion of wages, interest, dividends, and distributions from retirement accounts like 401(k)s and IRAs.

For example, a retiree receiving $24,000 in Social Security benefits while drawing $37,667 from an IRA might face higher tax obligations if inflation requires increased withdrawals. This could raise the taxable portion of their Social Security benefits, thus elevating their overall tax liability.

Tax Management Strategies for WeWork Retirees

To manage potential tax increases, WeWork retirees may consider several strategies:

  1. Diversifying Income Sources : Using brokerage accounts can help control how Social Security benefits are taxed, as capital gains may contribute to provisional income, but the principal does not.

  2. Strategic Withdrawals : Managing withdrawals from traditional 401(k)s or IRAs is essential, as these are taxed as ordinary income. Complying with required minimum distributions is also crucial to prevent penalties.

  3. Utilizing Tax-Advantaged Accounts : Withdrawals from Roth IRAs or Roth 401(k)s, and contributions to Health Savings Accounts (HSAs), are exempt from federal taxes and do not impact Social Security taxes.  https://www.irs.gov/  

Timing Social Security Benefits Wisely

Featured Video

Articles you may find interesting:

Loading...

Selecting the right time to begin collecting Social Security benefits is a critical decision. Starting benefits early may seem appealing, especially with an increased COLA, but it usually results in lower lifetime earnings. A more measured approach for WeWork employees could involve waiting until the Full Retirement Age (FRA) of 67 or even delaying until age 70, allowing benefits to increase by 8% annually after FRA.

Long-Term Planning for WeWork Retirees

Long-term tax planning is valuable for navigating retirement successfully. This approach includes multi-year strategies that can potentially reduce overall tax burdens. For comprehensive planning, it’s beneficial for WeWork retirees to consult with a tax advisor who can handle the intricacies of tax management effectively and align strategies with their financial and retirement goals.

Final Thoughts

Understanding the implications of the Social Security COLA is essential for WeWork retirees facing the challenges of inflation and tax planning. By adopting a careful financial strategy and seeking professional advice, retirees can enhance their financial foundation. Proactive financial management is key to building a stable and fulfilling retirement.

Additionally, WeWork retirees should note the  Senior Citizens' Freedom to Work Act of 2000 , which removes the earnings test for Social Security recipients who have reached or exceeded their full retirement age. This change allows retirees who continue working while receiving benefits to do so without a reduction in benefits, regardless of their earnings. This policy can significantly increase income flexibility for retirees who choose to remain active in the workforce.

What type of retirement plan does WeWork offer to its employees?

WeWork offers a 401(k) retirement plan to help employees save for their future.

Does WeWork match employee contributions to the 401(k) plan?

Yes, WeWork provides a matching contribution to the 401(k) plan, subject to certain limits.

How can WeWork employees enroll in the 401(k) plan?

WeWork employees can enroll in the 401(k) plan through the employee benefits portal or by contacting the HR department for assistance.

What is the eligibility requirement for WeWork employees to participate in the 401(k) plan?

Generally, WeWork employees are eligible to participate in the 401(k) plan after completing a specified period of employment, as outlined in the employee handbook.

Can WeWork employees change their contribution percentage to the 401(k) plan?

Yes, WeWork employees can change their contribution percentage at any time during the year, subject to certain limitations.

What investment options are available in WeWork's 401(k) plan?

WeWork's 401(k) plan offers a variety of investment options, including mutual funds and other investment vehicles, allowing employees to choose based on their risk tolerance and retirement goals.

Does WeWork provide financial education resources for employees regarding their 401(k) plan?

Yes, WeWork offers financial education resources and workshops to help employees understand their 401(k) options and make informed decisions.

What happens to my 401(k) plan if I leave WeWork?

If you leave WeWork, you have several options for your 401(k) plan, including rolling it over to an IRA or a new employer's plan, cashing it out, or leaving it with WeWork until you reach retirement age.

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

Yes, WeWork's 401(k) plan may have certain administrative fees and investment-related expenses, which are disclosed in the plan documents.

How often can WeWork employees contribute to their 401(k) plan?

WeWork employees can contribute to their 401(k) plan through payroll deductions, which occur with each paycheck.

New call-to-action

Additional Articles

Check Out Articles for WeWork employees

Loading...

For more information you can reach the plan administrator for WeWork at , ; or by calling them at .

*Please see disclaimer for more information

Relevant Articles

Check Out Articles for WeWork employees