Social Security claims are increasing sharply, and many near-retirees are wondering if they should follow this trend. With changes like the 3.2% cost-of-living adjustment (COLA) planned for 2025 and shifting retirement rules, the decision to file for Social Security benefits is becoming more important than ever. Understanding these changes can help you make smarter choices about when to start your benefits.
While filing early might mean receiving a lower monthly amount, there are several reasons why it could still be a good idea for many people. Factors such as rising unemployment and changes in the full retirement age (FRA) add pressure to act sooner rather than later. This article explains five key reasons why you might want to file your Social Security claim in 2025.
1. 3.2% Cost-Of-Living Adjustment (COLA) Boosts Benefits
This Article Includes
- 1 1. 3.2% Cost-Of-Living Adjustment (COLA) Boosts Benefits
- 2 2. Rising Unemployment Creates Uncertainty
- 3 3. Full Retirement Age (FRA) Shifts to 68
- 4 4. Longer Life Expectancy and Changing Retirement Plans
- 5 5. Locking in Benefits Before Future Changes
- 6 Conclusion: Early Filing Might Be Smart for Many Near-Retirees in 2025
The Social Security Administration projects a 3.2% COLA increase in 2025. This means your Social Security benefits will rise automatically to keep up with inflation. While this increase benefits everyone receiving Social Security, it also makes filing sooner more attractive. By claiming benefits early, you start getting the increased amount right away, helping you cover rising living costs.
For younger retirees or those nearing retirement, the extra income from the COLA increase can ease the transition from full-time work to retirement. Even if your monthly checks are smaller because you file early, the growing benefit after the COLA adjustment can help maintain your financial stability.
2. Rising Unemployment Creates Uncertainty
Unemployment rates have been rising recently, causing economic uncertainty for many workers. If you are close to retirement and worried about job security or finding new work, filing your Social Security claim early might provide some peace of mind with a steady monthly income.
Since Social Security benefits continue regardless of employment status, securing benefits early can protect you against income loss. This is especially important in unpredictable job markets where layoffs or reduced working hours are common. Early claims ensure a financial safety net during uncertain employment periods.
3. Full Retirement Age (FRA) Shifts to 68
The full retirement age for Social Security benefits is gradually increasing and will reach 68 in 2025. This means you’ll have to wait longer to claim your full benefits without reductions. Filing now before your FRA shifts can help you avoid the larger reductions that come with waiting until 68 or later.
The increase in FRA makes filing early seem more attractive, especially if you want to start receiving some income rather than waiting for the full benefit. Early filers get smaller monthly amounts, but the payments begin sooner, which can be beneficial depending on your financial needs and life plans.
4. Longer Life Expectancy and Changing Retirement Plans
People today are generally living longer, which affects how long Social Security benefits might support you. However, many younger retirees prefer having immediate income rather than waiting for larger benefits later. Filing early can provide essential funds to cover living expenses and health care as you adapt to your new lifestyle.
Since retirement plans are more flexible now, starting Social Security early allows you to combine benefits with other income sources like part-time work or savings. This approach can give you more control over your money and reduce stress during retirement.
5. Locking in Benefits Before Future Changes
Social Security rules and policies can change due to economic or political factors. Filing sooner can help you lock in your benefits under the current regulations, protecting you from possible future cuts or changes. For example, if new policies raise the FRA further or reduce COLA adjustments, early claimants benefit from the existing rules.
Acting now reduces the risk of unexpected changes that might lower your monthly payments or delay your benefits. By filing early in 2025, you secure your share of Social Security under today’s system, giving you greater certainty and peace of mind.
Conclusion: Early Filing Might Be Smart for Many Near-Retirees in 2025
Considering the 3.2% COLA increase, rising unemployment, and the FRA shift to 68, filing for Social Security benefits early in 2025 becomes appealing. Even if early filing reduces monthly payments, the trade-offs may suit your unique financial and personal situation better. Understanding these five reasons helps you make an informed decision about when to claim your Social Security benefits.
If you’re near retirement age, it’s worth reviewing your options and possibly filing sooner. Early claims provide immediate income, protection during uncertain economic times, and lock in current benefit rules. Taking action today could set you on a more secure path for your retirement years.
