Should You Delay Social Security in 2025?
The decision of when to start collecting Social Security is one of the most impactful choices you’ll make for your retirement income. From breakeven analysis to spousal strategies, cost-of-living adjustments (COLAs), and tax planning, here’s what to consider before you file, and why 2025 might be the perfect time for a personalized strategy.
The Big Question: Claim Now or Delay?
For many retirees, the temptation to claim Social Security at age 62 is strong. But delaying benefits can significantly increase your lifetime income. For every year you delay past full retirement age (up to age 70), your benefit grows by about 8% per year. The key is knowing whether that trade-off makes sense for your personal financial situation.
Breakeven Analysis: When Waiting Pays Off
Breakeven analysis compares the total value of benefits received when filing early versus waiting. If you live past your early 80s, delaying Social Security often results in more total income. But longevity isn’t the only factor, your income needs, health, and overall retirement strategy matter, too.
Don’t Forget Spousal Claiming Strategies
If you’re married, your decision can impact your spouse’s benefit as well. Strategies such as:
Claiming a spousal benefit while delaying your own
Coordinating survivor benefits
Maximizing the higher earner’s delayed benefit
…can result in thousands of dollars in added income over a retirement lifetime.
The COLA Factor: Growing Benefits Over Time
Each year, Social Security benefits receive a cost-of-living adjustment (COLA) to help maintain purchasing power. Delaying your benefit means your eventual payouts will be based on a larger initial amount — and future COLA increases are applied to that higher base. In periods of high inflation, this makes a notable difference.
Tax Coordination with IRA Withdrawals
Timing your Social Security also affects your taxable income. If you’re drawing from an IRA or 401(k), strategically delaying Social Security can help reduce the taxable portion of your benefits and manage your overall retirement tax burden. The goal? More after-tax income throughout retirement.
Let’s Find Your Optimal Filing Time
Social Security is too important to guess on, the difference between strategies can mean hundreds of thousands of dollars over a retirement. In 2025, before any new legislation or financial changes take hold, make sure you’re on the right path.
Schedule a Social Security Timing Consultation with our team today and gain the clarity you need to retire confidently and maximize your benefits.
Email: advisors@4wealthfg.com
Phone: 708-695-5300
