Boost Your 2025 Social Security Benefits: Two Moves to Make Now
Friday, Jan 31, 2025 4:05 pm ET
3min read As we approach 2025, retirees are looking for ways to maximize their Social Security benefits. With the cost-of-living adjustment (COLA) set to increase by 2.5 percent, it's essential to understand how to make the most of your benefits. Here are two moves retirees can make now to boost their 2025 Social Security benefit checks.
1. Delay claiming Social Security benefits
Delaying the start of Social Security benefits can significantly increase the monthly payments retirees receive. For every year a retiree delays claiming benefits past their full retirement age (FRA), their benefit increases by about 8 percent. This increase is capped at age 70, so there's no advantage to delaying beyond that point.
For example, if a retiree's FRA is 67, and they delay claiming benefits until age 70, they will receive a 24 percent increase in their monthly benefit. This strategy is particularly advantageous for those who expect to live longer and have other sources of income to cover expenses in the meantime.
2. Understand and leverage spousal benefits
Spousal benefits can significantly enhance retirement income for couples. If one spouse has a higher earning record, the other spouse may be able to claim benefits based on that record, potentially increasing their monthly income. Strategic claiming can optimize household income, where one spouse claims earlier benefits while the other delays their claims to increase their individual benefits.
For instance, consider a couple where the husband has a FRA benefit of $2,000, and the wife has a FRA benefit of $1,200. If the wife claims her own benefit at 66, she would receive $1,200. However, if she waits until her husband claims his benefit at 70, she can receive up to 50 percent of his benefit, which would be $1,000. This strategy increases their combined income by $200 per month.
In conclusion, retirees can take two key steps now to boost their 2025 Social Security benefit checks. By delaying the start of benefits and understanding and leveraging spousal benefits, retirees can maximize their monthly payments and better plan for their retirement years. Working with a financial advisor can help ensure that these complex benefit structures are navigated effectively.
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