As the year 2025 approaches, retirees aged 66 to 67 have a critical window of opportunity to claim their full Social Security benefits before the Cost-of-Living Adjustment (COLA) kicks in. By claiming Social Security now, eligible retirees can secure a monthly benefit of up to $3,822 before the COLA takes effect, potentially boosting future payments.
Understanding Full Retirement Age and Social Security Benefits
For those born between 1958 and 1959, the full retirement age (FRA) is 66 years and 8 months. Meanwhile, individuals born in 1960 or later reach FRA at 67. Claiming benefits at FRA allows retirees to receive 100% of their monthly Social Security entitlement based on their highest 35 years of earnings.
In 2024, the maximum monthly benefit for those retiring at FRA is $3,822, which will be paid out to those who file before reaching age 70. Claiming before FRA may seem like a good idea for some, as it allows immediate access to benefits, which can be especially beneficial for those with pressing financial needs.
The 2025 COLA: What It Means for Social Security Payments
Social Security recipients are set to see a 2.5% increase in their monthly benefits starting in 2025. This adjustment is designed to help offset inflation and maintain the purchasing power of benefits. Retirees who claim benefits before the COLA kicks in on January 1, 2025, will have their payment base raised by 2.5%, resulting in larger monthly payments.
So, if you’re thinking about claiming Social Security soon, timing your claim before the COLA takes effect could help boost your future income. That means your benefit will grow by the COLA percentage starting from a higher base, giving you more money each month.
Should You Wait to Claim?
For those who can afford to wait, delaying Social Security benefits can increase your monthly payments by 8% per year until you reach age 70. However, many retirees prefer to start receiving benefits as soon as they hit FRA, especially if they have urgent financial needs or simply want to enjoy their retirement without delay.
The added benefit of receiving your payments before the COLA is applied ensures you get the most out of your benefits earlier.
What About Married Couples?
Married couples should also consider the timing of their Social Security claims. Spouses are eligible for up to 50% of the higher-earning spouse’s benefit, which can add up to substantial monthly payments. Coordinating the timing of these claims can maximize household benefits and ensure that both spouses receive a higher payout after the COLA adjustment.
How to Maximize Your Social Security Benefits
For retirees aged 66 to 67, now is the time to consider your Social Security claim strategy. By filing for benefits before the 2025 COLA adjustment, you can ensure you receive the maximum benefit based on the upcoming increase. To make the most informed decision, consider speaking with a financial advisor to help you navigate the timing and maximize your benefits.
