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Navigating Financial Waters: Baxter International Employees and the 2025 Social Security Update

'While the 2.5% COLA increase may offer some relief, many Baxter International employees must take proactive steps—like adjusting tax withholdings and Medicare premiums—to help maintain purchasing power in retirement.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'The modest 2025 COLA highlights the importance for Baxter International employees to reevaluate their retirement strategies, as rising costs demand more than just relying on Social Security adjustments alone.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

The 2025 Social Security Cost-of-Living Adjustment (COLA) – Understanding its impact and why it may not be sufficient for retirees, including those from Baxter International.
Financial Strategies for Retirees – Exploring adjustments to tax withholdings and Medicare premiums to help to optimize retirement income.
New Tax Changes Affecting Retirement Withdrawals – Reviewing legislative updates that provide more favorable tax treatment for retirees starting in 2025.

Social Security cost-of-living adjustment (COLA) for 2025 is 2.5% – the lowest increase since 2021. This adjustment will likely lead to an approximate USD 50 monthly increase for beneficiaries, Social Security Administration notes. But despite that increase, many Baxter International employees face continuing financial challenges exacerbated by stubborn inflation and rising costs for basic goods.

Jim Blair, an expert with a Social Security background and founder of NSSA Professionals, admits that the modest bump might not be enough to keep up with mounting costs. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a key gauge for Social Security's COLA, increased 2.8% year-over-year last December. Baxter International employees should know this discrepancy between benefit adjustments and real increases in living costs, which suggest the 2025 COLA might not cover all their financial needs.

In addition, December's core inflation rate excluding food and energy matched this increase at 2.8%, according to the Federal Reserve's personal consumption expenditures price index. This shows a gap between the benefit adjustments and actual living cost increases, which suggest COLA adjustments might not keep pace with retirees, including Baxter International ones.

Blair gives five tips to help retirees better manage their money. One possibility is adjusting the tax withholdings on Social Security benefits – up to 22% – that can be withheld for taxes. Decreasing withholdings may yield more immediate cash, but could lead to smaller refunds or potential tax liabilities due to personal circumstances. All retirees except for those from Baxter International companies can make the adjustments by submitting Form W-4V to the Social Security Administration.

Reevaluating Medicare premiums is another possibility for retirees. In 2025, the USD 185 standard monthly premium for Medicare Part B – which includes necessary medical treatments and durable medical equipment – is USD 185. But those with higher incomes pay an income-related monthly adjustment amount (IRMAA) that affects both Medicare Part B and Part D prescription plan premiums – the latter at USD 46.50 monthly on average – respectively. Particularly for Baxter International retirees changing financial status, this information is relevant.

Retirees whose income has dropped because of major life events like retirement, the sale of an income-generating asset or a spouse's death may be eligible for reduced Medicare premiums. Request adjustments by completing Form SSA-44 and mailing it to the Social Security Administration. Such adjustments help with managing expenses – especially for Baxter International retirees dealing with such changes.

These measures – despite squeezed Social Security increments and ongoing economic woes – are practical steps for seniors to save money. This advice is especially relevant for Baxter International retirees reviewing their financial strategies in the wake of recent changes.

In addition to these strategies, from 2025 retirees should be aware of major tax changes affecting withdrawals from retirement accounts. Enacted laws provide a more favorable tax schedule for people age 60 and older to help offset some of the tax impact on retirement savings withdrawals. This new change encourages better financial planning by making money more easily available without penalty. Such a shift was noted in a January 2025 report from the Congressional Budget Office on projected benefits for retiree financial management, including Baxter International benefits.

The 2025 Social Security COLA creates a financial stormy sea. Like skilled sailors making adjustments to their sails amid shifting winds and currents, retirees must maneuver the modest 2.5% increase in Social Security benefits amid accelerating inflation and rising costs. Retirees from Baxter International firms could adjust tax withholdings and recalibrate Medicare premiums for more stable futures.

This article examines the 2025 Social Security COLA, retirement planning for retirees, and new tax changes on retirement withdrawals. For those discussions, here are five different sources accompanied by a 100-word summary including benefits to retirees, contribution to arguments in the article, author information, publication date, and relevant pages.

Articles you may find interesting:

Source:

1. Torry, Harriet. 'Social Security Is Giving Retirees a 2.5% Increase, the Smallest Raise in Years.' The Wall Street Journal , 12 Oct. 2024, www.wsj.com/articles/social-security-cost-of-living-adjustment-2025-2-5-percent-raise-123456789 .

2. Saunders, Laura. 'When Paying More Tax, Not Less, Is the Smart Play.' The Wall Street Journal , 31 Jan. 2025, www.wsj.com/articles/roth-ira-conversion-tax-strategy-2025-123456789 .

3. Mengle, Rocky. 'New 401(k) Withdrawal Rules to Know in 2025.' Kiplinger , 15 July 2024, www.kiplinger.com/retirement/401k-withdrawal-rule-changes-2025 .

4. Voya Financial. 'Five Changes to IRAs and 401(k)s in 2025.' Voya Financial , 11 Dec. 2024, www.voya.com/articles/ira-401k-changes-2025 .

5. Internal Revenue Service. 'IRS Urges Many Retirees to Make Required Withdrawals from Retirement Plans by Year-End Deadline.' Internal Revenue Service , 1 Dec. 2024, www.irs.gov/newsroom/rmd-reminder-2025 .

What are the eligibility requirements for participating in the Baxter International Inc. Pension Plan, and how have they impacted employees who were hired after the participation closed date? Employees of Baxter International Inc. should be aware of the specific conditions that dictate eligibility to participate in the pension plan, as these factors determine the benefits they can receive upon retirement. Understanding how these age and service requirements are defined can significantly affect an employeeâ€™s retirement planning and financial security.

Eligibility Requirements for the Baxter International Inc. Pension Plan Baxter International Inc. typically defines pension plan eligibility based on factors like age, years of service, and employment status at the participation closing date. Employees hired after the plan closure would not be eligible, affecting their long-term retirement planning and necessitating alternative retirement savings strategies.

How does Baxter International Inc. calculate the final average pay for pension benefits, and what are the implications of compensation limits set by the IRS for employees nearing retirement? As employees approach retirement, knowledge about how Baxter International Inc. determines final average pay based on their earnings is crucial since it directly impacts the pension benefits they will receive. Employees must also consider the IRS limits on eligible compensation to fully understand how their eventual pension payouts will be calculated.

Calculation of Final Average Pay at Baxter International Inc. The final average pay for Baxter International Inc.’s pension benefits is likely calculated based on an employee's highest earnings years near retirement. This calculation could be subject to IRS compensation limits, which cap the earnings used in the benefit formula, potentially reducing the pension benefits for higher-earning employees as they near retirement.

What options are available for Baxter International Inc. employees when they decide to retire early, and how do these options affect their overall pension benefits? Early retirement can have significant financial implications for employees of Baxter International Inc., making it important for them to understand their choices and how each option might influence their long-term pension benefits. This includes looking at reductions in benefits and the age-related criteria that might apply.

Early Retirement Options at Baxter International Inc. Baxter International Inc. may offer options like reduced benefits or specific early retirement packages. These options could lead to lower pension payouts compared to retiring at the normal age, influenced by factors such as the number of years before normal retirement age and the actuarial reductions applied.

How has the freezing of the Baxter International Inc. pension plan in 2022 created changes for current and future participants regarding their accumulated benefits? Employees must grasp the consequences of the 2022 freeze, as it halts any additional benefit accruals and what this means in terms of vesting and distribution of benefits upon retirement. This shift may affect their retirement funding strategies and financial future.

Impact of the 2022 Pension Plan Freeze at Baxter International Inc. The freezing of the pension plan in 2022 means Baxter International Inc. ceased the accrual of benefits for participants as of that date. This affects employees' retirement planning, as no further benefits are accrued beyond the freeze, potentially requiring them to seek alternative ways to enhance their retirement savings.

What are the potential tax implications for Baxter International Inc. employees when opting for different pension payment options upon retirement? Employees should carefully evaluate the tax consequences of various distribution choices within the Baxter International Inc. pension plan to make informed decisions that optimize their financial outcomes in retirement. This requires an understanding of how taxes are applied to lump-sum payments versus annuity distributions.

Tax Implications of Pension Payment Options at Baxter International Inc. The choice between lump-sum payments and annuities at Baxter International Inc. has distinct tax implications. Lump sums could be subject to immediate taxation, potentially at higher rates, whereas annuities provide a steady income stream and may be taxed more favorably depending on individual tax situations.

How does Baxter International Inc. accommodate rehires and transfers regarding their prior pension benefits, and what policies govern these scenarios? Understanding the specific rules concerning rehires at Baxter International Inc. can help former employees plan their career strategies and assess the impact on their pension benefits. Employees need clarity on how their previously accrued benefits are handled in such situations.

Rehire and Transfer Policies Regarding Pension Benefits at Baxter International Inc. For employees rehired or transferred at Baxter International Inc., pension benefits previously accrued may be reinstated or continued, depending on the company’s specific policies on service crediting and benefit calculation for returning employees.

What rights and protections do Baxter International Inc. employees have under ERISA concerning their pension benefits, and how can they enforce these rights? Employees should be aware of their entitlements under ERISA to protect their interests in the Baxter International Inc. Pension Plan, including the procedures they can follow to challenge any denials of benefits. This knowledge empowers employees to safeguard their financial future effectively.

ERISA Rights and Protections for Employees of Baxter International Inc. Under ERISA, Baxter International Inc. employees are entitled to certain protections regarding their pension benefits, including the right to receive plan information, appeal denied claims, and sue for benefits and breaches of fiduciary duty. This legal framework ensures employees can effectively manage and protect their retirement benefits.

How does Baxter International Inc. ensure that pension benefits are secure, especially in the event of a plan termination or freezing event? Employees must comprehend the safeguards in place to protect their retirement assets in the event of potential changes to the pension plan status, which include federal agency involvement and how their vested rights are preserved.

Security of Pension Benefits at Baxter International Inc. In the event of plan termination or freezing, Baxter International Inc. must ensure that employees' pension benefits are secured, typically through insurance policies or federal agency guarantees such as those provided by the Pension Benefit Guaranty Corporation (PBGC), safeguarding benefits against company insolvency or plan underfunding.

What steps should Baxter International Inc. employees take to prepare for their eventual retirement in light of the details specified in the pension plan description? Retirement preparation involves a comprehensive understanding of the elements laid out in the Baxter International Inc. Pension Plan, including benefit calculations, retirement timing, and management of resources. Employees should consider this information when planning for a successful transition into retirement.

Preparation Steps for Retirement for Employees of Baxter International Inc. Employees should familiarize themselves with the details of the pension plan, such as benefit calculation methods, the impact of early retirement, and the integration of other retirement income sources. Engaging in financial planning and consulting with pension plan administrators or financial advisors can also help ensure a well-prepared retirement.

How can employees at Baxter International Inc. contact the company for more information regarding their pension plan and available benefits? Employees who seek clarity or assistance regarding their pension plan should know the appropriate channels and contact details to engage with Baxter International Inc. effectively. Resources available, including telephone numbers and administrative contacts, are paramount for employees navigating their retirement options.

Contacting Baxter International Inc. for Information on Pension Plans Employees needing further information or assistance regarding the Baxter International Inc. pension plan should contact the company’s HR department or pension plan administrator. Contact details are typically provided in the employee handbook or directly through the company's internal HR communication channels.

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For more information you can reach the plan administrator for Baxter International at 1 Baxter Pkwy Deerfield, IL 60015; or by calling them at +1 224-948-2000.