As we approach the year 2025, retirees aged 66 and 67 have an important opportunity to maximize their Social Security benefits.
If you’re in this age group, you could be eligible for up to $3,822 in monthly Social Security payments, but it’s crucial to understand how to claim this amount before the upcoming Cost-of-Living Adjustment (COLA) change takes effect.
In this article, we’ll explore how retirees in their late 60s can make the most of their Social Security benefits, including how the 2025 COLA increase will impact future payments and why acting now could make a significant difference in the amount you receive.
What Is COLA and How Does It Affect Social Security?
Each year, Social Security benefits are adjusted to account for inflation through the Cost-of-Living Adjustment (COLA). This adjustment ensures that retirees’ benefits keep pace with rising prices, including those for food, healthcare, and other essentials. The COLA percentage is based on the Consumer Price Index (CPI), a government measure of inflation.
In 2024, Social Security recipients saw a 3.2% COLA increase, but for 2025, estimates suggest that the COLA could be even higher, potentially offering a boost to benefits. However, the COLA increase could also result in a higher eligibility threshold for maximum Social Security payments, so it’s important to claim your benefits before these adjustments take place.
How Much Can Retirees Aged 66-67 Claim in Social Security Payments?
For retirees aged 66-67, the maximum monthly Social Security payment in 2024 can be up to $3,822 if you delay claiming until your full retirement age (FRA). This amount represents the maximum benefit available to someone who:
- Waits until their FRA (which is 66 or 67 depending on your birth year) to start receiving Social Security payments
- Has worked for a substantial number of years (typically at least 35 years) and earned the maximum taxable income over that time period
If you claim Social Security at age 66 or 67, you will receive a significantly higher payment than someone who starts claiming at age 62, which is the earliest age you can begin receiving Social Security. The difference can be up to $1,000 or more per month, depending on your work history.
Why Should Retirees Aged 66-67 Act Now?
If you’re 66 or 67, you are nearing the age where you can claim full Social Security benefits. However, there’s a critical reason to consider claiming your benefits before the 2025 COLA adjustment: The higher your payments now, the better.
- Lock In Current Payment Levels: By claiming your benefits now, you lock in your $3,822 maximum payment. If you wait until the 2025 COLA increase takes effect, while it could increase your payments, the adjustment may not be as significant as claiming your maximum benefit right away.
- COLA Adjustment Could Reduce Potential Earnings: If the 2025 COLA is higher than expected, it might lead to an increase in the base amount for Social Security. While this is generally good news for retirees, those who have not yet claimed their benefits may see a reduction in their potential payments after the adjustment. By acting now, you may ensure that you can maximize your benefits before these changes take place.
- Your Payments Will Continue to Grow: Social Security benefits grow by a certain percentage for every year you delay claiming beyond your full retirement age. However, once you reach age 70, that growth stops, and your benefits remain at the highest possible level. By claiming now, you ensure that you get the most out of your benefits over the long term.
- Protect Against Future Inflation: The COLA increase is designed to help keep pace with inflation, but it’s not always enough to offset the cost of living entirely. By claiming a larger Social Security payment now, you will be better positioned financially if inflation continues to rise in the coming years.
How to Claim Your Social Security Benefits Now
California Announces Increase in Social Security Payments Effective December 30
If you are ready to claim your Social Security benefits, follow these steps:
- Determine Your Full Retirement Age (FRA): Your FRA depends on the year you were born. For those born between 1943 and 1954, your FRA is 66. For those born in 1955 or later, your FRA is 67. If you’re 66 or 67, now is the time to start planning for your Social Security claim.
- Decide When to Start Receiving Payments: You can begin receiving payments as early as age 62, but waiting until your FRA will ensure you receive the maximum amount. The longer you delay (up until age 70), the higher your monthly payment will be.
- Apply Online, Over the Phone, or In Person: You can apply for Social Security benefits through the Social Security Administration’s website, by calling their toll-free number, or by visiting a local office. Applying online is often the easiest and fastest method.
- Consider Working with a Financial Planner: Social Security is just one piece of the retirement puzzle. A financial planner can help you decide the best time to claim your benefits and how to coordinate them with other retirement savings accounts to maximize your income.
How the 2025 COLA May Impact Your Future Payments
As we approach 2025, the COLA increase could have a significant impact on the purchasing power of retirees. If inflation continues to rise, the COLA could be higher than previous years, meaning that Social Security payments could increase for those who are already receiving benefits. However, those who claim their benefits earlier may not see the same level of increase in their monthly payments.
While the COLA increase in 2025 could help boost Social Security payments, it’s important to remember that the increase will apply to those already receiving benefits, not those who haven’t yet filed. That’s why retirees aged 66-67 should act sooner rather than later to lock in their maximum payment amount.
Conclusion
Retirees aged 66-67 have a unique opportunity to maximize their Social Security benefits, especially with the potential COLA increase in 2025.
By claiming your $3,822 in Social Security payments now, you can secure a higher monthly income before any adjustments take place.
Remember, the longer you wait to claim your benefits (up until age 70), the more you can receive, so don’t delay in making this important decision. Act now to ensure you’re getting the most out of your Social Security benefits and make sure your retirement years are financially secure.