Annual 401(k) plan contribution limits and federal income tax brackets get an inflation adjustment each year. However, many common financial mechanisms like the minimum wage aren’t indexed to inflation. Others include financial thresholds tied to taxes on Social Security benefits, accredited investors and certain tax deductions. Martin Barraud | Ojo Images | Getty Images

Many Americans are likely familiar with financial thresholds that are adjusted for inflation each year.

They include contribution limits to 401(k) plans, cost-of-living adjustments for Social Security benefits and federal income tax brackets, to name a few.

These tweaks help households keep pace with the rising cost of living.

For example, without adjustments, more households would generally creep into higher tax brackets over time and the buying power of Social Security beneficiaries would fall.

But some thresholds, like the federal minimum wage, aren’t inflation-adjusted.

What is and isn’t inflation-indexed largely depends on lawmakers’ whims when they drafted respective legislation, said Bill Hoagland, senior vice president at the Bipartisan Policy Center. “It’s all over the map,” he said.

Inflation adjustments can be a “double-edged sword,” said Mark Zandi, chief economist at Moody’s Analytics.

During times of high inflation as in 2022, the lack of an adjustment “could quickly become a financial problem” for households, Zandi said.

If everything were indexed, however, it’d be more difficult “to get inflation back in the bottle when everything takes off,” he added.

Here are some common thresholds that don’t get an annual inflation adjustment.

Minimum wage

The federal minimum wage — $7.25 an hour — has remained unchanged since 2009.

That’s the longest period in history without an increase from Congress, according to the Economic Policy Institute, a left-leaning think tank.

The minimum wage has lost 29% of its value since 2009 after accounting for the rising cost of living, according to an EPI analysis. It’s worth less than at any point since February 1956, the group found.

That said, just 1.3% of all U.S. hourly workers (about 1 million people total) were paid wages at or below the federal minimum in 2022, according to the Bureau of Labor Statistics. That’s “well below” the 13.4% share in 1979, it said.

Thirty states plus the District of Columbia have adopted a higher minimum for

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Bill Ackman’s firm is raising $1.05 billion in a funding round, worth 10% of his management company Pershing Square, according to a source familiar with the matter. The hedge-fund manager is eyeing an initial public offering in the U.S. down the road, but he hasn’t hired bankers or started that process officially yet, the source said. Bill Ackman, Pershing Square Capital Management CEO, speaking at the Delivering Alpha conference in New York City on Sept. 28, 2023. Adam Jeffery | CNBC

Billionaire investor Bill Ackman is selling a 10% stake in Pershing Square, aiming to eventually take his investment firm public.

Ackman’s firm is raising $1.05 billion in a funding round, worth 10% of the management company and implying a valuation of $10.5 billion, according to a source familiar with the matter. Investors on the deal are institutional and family offices who prefer to remain anonymous, the source said.

The Wall Street Journal first reported on the moves. Pershing Square declined to comment.

With the funding round, the hedge-fund manager is eyeing an eventual initial public offering in the U.S., but he hasn’t hired bankers or started that process officially yet, the source said.

Two years ago, Ackman named Ryan Israel chief investment officer, marking the first time the billionaire hedge-fund manager appointed someone else to run day-to-day investing for the firm. Ackman serves as CEO, with ultimate control over decision-making, although he has said that Israel would be his successor to run the firm if he got hit by a “pie truck.”

Pershing Square had $18.6 billion in total assets under management as of the end of April. Most of its capital is in Pershing Square Holdings, a closed-end fund that trades on European stock exchanges. 

Ackman has become one of the world’s most prominent hedge-fund investors after years of market-topping returns and vocal activist campaigns. He also gained a wide following on social media platform X with 1.2 million followers, commenting on issues ranging from antisemitism to the presidential election.

Earlier this year, Ackman unveiled plans to offer a new investment vehicle listed on the New York Stock Exchange, a move to leverage his following among Main Street investors. He is launching a publicly traded closed-end fund, investing in 12 to 24 large-cap, investment-grade, “durable growth” companies in North America.

The popular investor’s hedge fund held

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