Are you aware of the financial thresholds that are adjusted for inflation each year? These adjustments impact various aspects of personal finance, such as contribution limits to retirement accounts, Social Security benefits, federal income tax brackets, and more.
At Extreme Investor Network, we understand the importance of staying informed about these adjustments to ensure that your financial strategy remains effective. Our experts have highlighted some common thresholds that do not receive annual inflation adjustments, shedding light on areas where individuals may need to be more proactive in managing their finances.
For example, the federal minimum wage has remained at $7.25 per hour since 2009, making it the longest period without an increase in history. With the rising cost of living, the minimum wage has lost 29% of its value, impacting both workers and the economy. However, only 1.3% of U.S. workers were paid at or below the federal minimum wage in 2022, showing a significant improvement from previous years.
Another important threshold that does not receive inflation adjustments is the taxation of Social Security benefits. Since 1984, beneficiaries’ income thresholds for taxability have not been adjusted for inflation, leading to a growing number of individuals paying federal income tax on their benefits. Understanding how your Social Security benefits are taxed can help you better plan your retirement income strategy.
Additionally, thresholds for accreditation as an investor in private companies and investments have remained unchanged since the 1980s. Ensuring that investors meet certain income or net worth requirements is crucial for protecting consumers, but it is essential to review these thresholds periodically to reflect changes in the economy and investment landscape.
By staying informed about these thresholds that are not inflation-adjusted, you can make more informed decisions about your finances and plan for the future effectively. Keep an eye on our blog for more insights and updates on personal finance topics to help you achieve your financial goals. Extreme Investor Network is your go-to resource for expert advice and valuable information on all things personal finance.