This is the 20th edition of The Valor Brief, my weekly newsletter. This week covers three topics:
- SAVE Is Shut Down. What Borrowers Need to Do Now
- The 2027 Social Security Raise and What Medicare Takes Back
- Year-End Money Moves Worth Making Before December 31
SAVE Is Shut Down. What Borrowers Need to Do Now
If you have student loans, this is the update you need to see right now.
The SAVE repayment plan, which launched in 2023 to lower monthly payments for millions of borrowers, has been officially shut down. About 7 million people were enrolled in it. They had a deadline to pick a new plan, and the cost of missing it is significant.
Here’s the simple breakdown
Borrowers who re-enroll in another income-driven plan will typically pay around 3% of their take-home pay, according to the JPMorgan Chase Institute. That’s roughly where payments were before the pandemic.
Borrowers who miss the deadline and get shifted to a fixed payment schedule could see their monthly bill jump to around 12% of take-home pay. Four times higher.
The first deadline was September 29th. If you missed it or you’re not sure where you landed, don’t wait. The Education Department already had a backlog of 530,000 pending applications as of April, so acting early matters.
A few more things worth knowing
Two older plans, PAYE and ICR, are also being phased out by July 2028. That affects borrowers across roughly 13 million accounts in income-driven repayment plans total.
Two plans are staying available: Income-Based Repayment, where your payment is based on income and family size, and the newer Repayment Assistance Plan, which launched in July 2026. The RAP sets payments between 1% and 10% of income, with any remaining balance forgiven after 30 years.
Here’s what I’m talking about with clients right now:
- Borrowers on SAVE: check your deadline and start your application now, don’t wait for the backlog to clear
- Anyone on PAYE or ICR: start evaluating IBR or RAP before 2028, not after
- Families with a mix of income changes ahead (new job, growing family): your income-driven payment calculation may shift, so run the numbers before locking in a plan
If you or someone you know has student loans, what’s the biggest question you’re sitting with right now?
The 2027 Social Security Raise and What Medicare Takes Back
The Social Security Administration announced the 2027 cost-of-living adjustment on October 14. It’s 3.6%. For the average retired worker, that works out to about $75 more per month, starting with the benefits paid for January 2027.
A raise is a raise, and I’m glad to see it. The headline number and the deposit in your bank account are two different figures, though. For most people on Medicare, the Part B premium comes out of the Social Security check before you ever see it.
What will Part B cost?
The standard Part B premium is $202.90 a month in 2026. The Medicare Trustees project $209.50 for 2027, which is $6.60 more. The Part B deductible is projected to go from $283 to $292. Those are projections. CMS usually finalizes the real numbers in November, so treat them as a close estimate for now. Higher earners pay an income-related surcharge on top of the standard premium.
THE MATH
The math: $2,400 × 3.6% = $86.40 raise, minus $6.60 = $79.80
Say a retiree gets $2,400 a month from Social Security today. A 3.6% increase adds about $86 and brings the benefit to roughly $2,486. If the Part B premium goes up $6.60, that retiree keeps about $79.80 of the raise. Still a gain, just a little smaller than the headline suggests.
Medicare open enrollment is underway
Medicare open enrollment runs from October 15 through December 7. If you have a Medicare Advantage plan or a Part D drug plan, those plans change their premiums, drug lists, and provider networks every year, and the changes take effect January 1. Your plan should have mailed you a notice of changes by now. Read it. Check that your doctors and prescriptions are still covered and see what they’ll cost you next year. Letting a plan renew on autopilot is how people end up with a surprise in February.
If you’re a few years from retirement, build Medicare into your budget as its own line item, and expect that line to grow over time.
- Log in to your Social Security account and compare your 2027 benefit to your current check
- Pull your plan’s notice of changes and compare it against your doctors and prescriptions before December 7
- Budget for a Part B premium of around $210 a month per person, more if your income is high
Year-End Money Moves Worth Making Before December 31
There are about eleven weeks left in the year. Most year-end planning gets crammed into the last week of December, when payroll cutoffs, custodian deadlines, and holiday schedules all collide. Starting in October gives you room to make decisions on purpose.
Check your retirement contribution pace
For 2026, you can contribute up to $24,500 to a 401(k), 403(b), or governmental 457 plan, and up to $7,500 to an IRA. If you’re 50 or older, you can add an $8,000 catch-up. If you’re 60 to 63 and your plan allows it, the catch-up is $11,250 instead.
Your last paycheck of the year is the real deadline for 401(k) deferrals. Pull your most recent paystub, find the year-to-date contribution, and compare it to your goal. IRA contributions are different. You have until the tax filing deadline next April.
THE MATH
Say you’ve put in $15,000 through September and you have six biweekly paychecks left. To reach $24,500, you need another $9,500. Divide that by six and you land at about $1,583 per paycheck. Better to find that out now than on the last pay date.
One new wrinkle: if you’re 50 or older and your wages from your employer were above $150,000 last year, your catch-up contributions this year generally have to go in as Roth.
Required distributions and charitable giving
If you’re subject to required minimum distributions, the deadline for most people is December 31. Miss it and the IRS charges an excise tax of 25% on the amount you should have taken, reduced to 10% if you fix it quickly. If you’re 70½ or older and give to charity, a qualified charitable distribution sends money straight from your IRA to the charity. It can count toward your required distribution and stays out of your taxable income.
If you own a business
A retirement plan has to exist before employees can start deferring into it, and the calendar for getting one in place for this year is getting short. SECURE 2.0 also added tax credits that can offset a meaningful part of the startup costs for small employers. If a plan has been on your list, now is the time to start the conversation.
A short list to work through this month:
- Check your year-to-date 401(k) contributions and adjust your deferral for the paychecks that remain
- Spend or confirm your flexible spending account balance, since many plans have use-it-or-lose-it rules
- Take any required minimum distributions before December 31
- Run the IRS withholding estimator to see whether you’re headed toward a refund or a balance due
If there’s one financial decision you’re wrestling with (a mortgage, debt payoff strategy, investment question, budgeting challenge, or something else entirely), I’d be happy to help. I’ve set aside time for a complimentary 15-minute conversation focused on one topic that’s on your mind.
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This newsletter is for informational purposes only and is not intended to serve as specific financial advice. Valor Financial Planning does not provide tax, legal, or accounting advice. Consult with a qualified professional for personalized financial advice tailored to your unique circumstances. Investment decisions should be made based on your individual goals, risk tolerance, and financial situation. Past performance does not guarantee future results.