THE WEEK ON WALL STREET
Stocks rallied last week as investors reacted positively to a handful of better-than-expected corporate earnings reports and developments out of Washington, D.C. The S&P 500 Index gained 1.74 percent, while the Nasdaq Composite Index added 1.65 percent. The Dow Jones Industrial Average rose 2.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 3.03 percent.
FACT OF THE WEEK
On January 27, 1993, American Chad Rowan became the first non-Japanese sumo wrestler to become a “yokozuna,” the sport's highest rank. Rowan, a 23-year-old Hawaii native who stands 6-foot-8 and weighs 455 pounds, is the 64th person to hold the top rank in sumo, Japan's national sport.
MARKET MINUTE
Flurry of News
Markets surged over the first three trading days as investors cheered a flurry of new policy announcements and executive orders following Monday’s inauguration. For example, investors responded to news that the White House trade team is considering taking a softer stance on tariffs. It was also a good week for Q4 company reports and other upbeat corporate news. Markets leveled off Friday as investors were disappointed that existing home sales fell to a 30-year low. But for the week, the Nasdaq had closed above 20,000 on two of the four trading days, and the S&P 500 closed above 6,000 at every session.
A Look Forward
The stock market is a discounting mechanism, meaning today’s stock prices reflect all available information, including present and potential future events. And for the most part, the markets reacted positively to the news coming out of Washington last week. Some news spurred broad-based market moves, while other news had more sector-specific impacts. For example, on Thursday, markets reacted positively to news that the White House believes interest rates were too high and want to see rates trend lower. The Fed’s first scheduled two-day policy meeting ends on Wednesday, so investors may be looking to see if Fed Chair Jerome Powell addresses the new administration's concerns.
FINANCIAL STRATEGY OF THE WEEK
What's New for Social Security?
Whether you’re applying for Social Security in the future or currently receiving benefits, there are some important changes to earnings limits, Medicare premiums, and other differences to keep in mind. Ready to learn more? Read on.
Ready for a Cost-of-Living (COLA) increase?
That's right! Due to an increase in the Consumer Price Index (CPI-W), the Social Security Administration (SSA) has made a 2.5-percent COLA Adjustment.
What about Tax Caps?
Employees everywhere will be happy to hear that the cap on wages subject to Social Security withholdings has increased to $176,100.
Any change to earning limits?
If a working individual starts receiving Social Security payments before full retirement age, the Social Security Administration will deduct $1 in benefits for each $2 that person earns above an annual limit. In 2025, the income limit is $23,400.
During the year in which a worker reaches full retirement age, Social Security benefit reduction falls to $1 in benefits for every $3 in earnings. For 2025, the limit is $62,160 before the month the worker reaches full retirement age.
Are Medicare Part B Premiums Affected?
Social Security recipients will see a $10.30 increase in Part B premiums. But Medicare beneficiaries who file joint tax returns and earn $212,000 or more in 2025 may pay a higher premium.
How much do I need to earn for one Social Security “credit”?
For 2025, you’ll need to earn $1,810 to earn one “credit” toward Social Security and Medicare, up from $1,730 in 2024. What remains the same? You can only earn four credits each year, and you must earn at least 40 credits in order to qualify for benefits.
For many, Social Security may be an important source of income during their “second act.” If changes to Social Security give you pause or make you question if you are making the most of your benefits, a qualified financial professional may be just the person you need to help you realize your retirement strategy’s full potential.