Social Security Hacks Before You Retire
Retirement planning today feels like trying to hit a moving target
A lot has changed over the past 80 years. Gone are the days when retirees got a pension and a gold watch at 65 and coasted into the sunset for a few more years. That tradition of giving a gold watch began with PepsiCo in the 1940s. According to the Philadelphia Tribune, Pepsi’s management embraced the idea of “you gave us your time, now we are giving you ours.”
Fast forward to today. Medical advances, healthier lifestyles, and longer lifespans mean many of us now expect retirements lasting 30 years or more, often as long as our working lives. That makes knowing how much income you’ll need the day you retire and every year after – not just smart but critical. A pension? Rarely offered anymore by major employers. The weight of funding your retirement rests squarely on you as we discuss on our retirement page.
At Ulin & Co., we call this your comprehensive retirement income plan. It’s the roadmap for replacing your paycheck, managing risks, and staying flexible so retirement isn’t just about getting by, it’s about living well. For many of our clients, Social Security is one piece of the puzzle. It’s not the whole story, but getting it right and planning for inflation and taxes over time can make a big difference.
Break-Even Math You Need to Know
Choosing when to enroll in Social Security comes with tradeoffs that aren’t always obvious. Enroll early at age 62 and your benefit drops by about 30%. Claim at full retirement age—66 or 67 depending on your birth year—and you get 100%. Wait until 70 and your benefit increases about 8% per year or roughly 27% higher than full retirement age.
Here’s an example. Claim at 67 and your annual benefit could be $30K. Delay until 70 and it jumps to $37,200. But skipping three years of payments means you miss out on $90K payments. The higher benefit only starts pulling ahead around age 82, which is the break-even point for most retirees who delay until 70.
That 12-year window is critical. If you have health concerns or a shorter family life expectancy, claiming early at 62 could be the smarter move. For those in good health who expect to live into their late 80s or early 90s, starting benefits around age 67 may still strike the right balance between maximizing income and enjoying retirement sooner while looking at your whole income picture.
Longevity and Perspective
If your health and family history suggest you’ll enjoy a long retirement, carefully weighing your Social Security strategy is essential. Still, it’s worth noting that less than 1% of Americans live past 100. You may recall the Smucker’s jar recognition that became a milestone for centenarians on NBC’s Today Show many years ago. Willard Scott and now Al Roker have celebrated 100-year-olds by featuring their photo on a Smucker’s jelly jar.
While most of us won’t make it to that notorious jar, about 24% of Americans do live to age 90 or older. This varies sharply between men and women, with 16% of men and 34% of women reaching their 90s, according to the BMJ medical journal. (see chart)
Living longer is a blessing, but a challenge for the Social Security trust fund
Smart Enrollment Moves
Social Security isn’t one size fits all. Marital history and status can unlock options that many overlook:
- Married couples may benefit from the higher earner delaying to increase survivor benefits.
- Divorced individuals who were married 10 years or more may claim up to 50% of their ex-spouse’s benefit, even if the ex hasn’t filed.
- Widows and widowers can start survivor benefits as early as age 60, then switch to their own higher benefit later.
These strategies aren’t academic trivia, they’re practical steps that can add tens of thousands of dollars to your lifetime income.
For Millennials and Gen Z: Social Security Backup Plan
What are the challenges facing Social Security today? The program operates primarily on a pay-as-you-go system. This means that the payroll taxes of current workers are used to pay for current benefits. In other words, the payroll taxes you paid do not go toward your own benefits in the future, but toward a current beneficiary’s Social Security checks.
If you’re in your 30s or 40s, Social Security probably feels like a distant promise. The trust funds are projected to run dry by 2034. After that, payroll taxes would cover only about 78% of scheduled benefits (U.S. gov) unless Congress intervenes. Meanwhile, the national debt is closing in on $36.6 trillion, and annual interest payments are approaching $1 trillion. (U.S. Debt clock)
That’s why younger clients should approach Social Security as a bonus, not the foundation. Focus now on maximizing contributions to your 401(k), IRA, HSA, and taxable accounts. Build flexibility through Roth conversions and diversified savings so you stay in control of your financial future regardless of what happens in Washington.
If you are in your early 40s and still 20 or more years from retirement, remember to factor inflation into your income assumptions. Even at a modest 3.4% inflation rate, your cost of living could double in 20 years using the Rule of 72. For example, if you think you will need $80,000 a year to retire today, you may actually need closer to $160,000 by the time you stop working. Knowing your total retirement income goal, and how much of that might realistically come from Social Security, is a critical part of smart planning.
While the 2034 depletion date for Social Security’s trust funds is still years away, the urgency to address the program’s challenges is growing. A complete elimination of benefits is highly unlikely, but future modifications are almost certain.
Factor in Taxes on Social Security
Even in their 60s and 70s, many retirees continue working part time, not so much for the income, but to stay active and connected. What surprises many is how this can trigger taxes on their Social Security benefits.
The IRS uses something called “combined income” to figure out how much of your Social Security is taxable. It’s your adjusted gross income (AGI), plus any nontaxable interest, plus half of your Social Security benefits.
If you’re single and your combined income exceeds $25,000, up to 50% of your Social Security may be taxed at ordinary income rates. For married couples filing jointly, the threshold is $32,000. And for higher incomes above $34,000 for singles and $44,000 for couples – up to 85% of your benefits could be taxable.
Today’s Shifting Landscape
Retirees face headwinds. Cost-of-living adjustments are expected but could be eaten up by rising Medicare premiums. Paper checks for Social Security end next September, requiring direct deposit for all recipients. And future budget moves could raise the retirement age or adjust benefits for higher earners.
Staying informed and proactive ensures these changes don’t derail your retirement income plan.
The Bottom Line: Social Security Is Just One Piece of the Puzzle
Social Security isn’t disappearing, but it was never designed to carry the full weight of your retirement. The old three-legged stool—pension, savings, and Social Security—has been whittled down to a shaky two-legged bench. For most Americans, the burden now rests squarely on personal savings.
If you’re close to retiring, your decision about when to file should reflect your health, lifestyle goals, and the break-even math. For those 10 or 20 years away, the priority is clear: build your wealth as if Social Security will supplement your plan, not anchor it.
The goal is simple: maximize your benefits, create a retirement that’s secure and fulfilling, and ensure you don’t outlive your money—or your peace of mind.
A smart retirement plan doesn’t rely on blind faith in government programs, nor does it ignore their role completely. It acknowledges Social Security for what it is: a valuable tool, but just one part of a well-diversified strategy to help you live the retirement you’ve envisioned.
For more information on our firm or to request a complimentary investment and retirement check-up, call (561) 210-7887 or email jon.ulin@ulinwealth.com.
Author: Jon Ulin, CFP® is the founder and Managing Principal of Ulin & Co. Wealth Management, an independent advisory firm based in Boca Raton, South Florida for over 20 years. As a fiduciary wealth advisor, Jon helps successful individuals, families, and business owners nationwide with multi-generational planning, investment management, and retirement strategies. Learn more about Jon and our team at About/CV.
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Information provided on tax and estate planning is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
You cannot invest directly in an index. Past performance is no guarantee of future returns. Diversification does not ensure a profit or guarantee against loss. All examples and charts shown are hypothetical used for illustrative purposes only and do not represent any actual investment. The information given herein is taken from sources that are believed to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as NewEdge Advisors, LLC does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors.
