The Definitive Social Security Guide for Near-Retirees and Newly Retired Christians: What You Need to Know Before You Claim

Here's a sobering truth that might surprise you: Most Christians approaching retirement are about to make a Social Security decision that could cost them tens of thousands of dollars, or more, over their lifetime. And the window to get it right is rapidly closing.

If you're between 60-70 years old and haven't started drawing Social Security yet, you're sitting at one of the most critical financial crossroads of your life. The choices you make in the next few years about when and how to claim your benefits will impact not just your monthly income, but your ability to be a faithful steward of God's resources, support your family, give generously, and leave a meaningful legacy.

But here's the good news: You have time to get this right. And by the time you finish reading this comprehensive guide, you'll understand exactly what you need to know to make the most informed Social Security decision possible, one that honors both your financial goals and your Christian values.

Stay with me through this entire guide. The most critical information that could save or cost you thousands is coming at the end, and you'll want to have the full foundation first.

Understanding Your Social Security Foundation

Before diving into claiming strategies, let's establish the basics. Social Security isn't just a government program, for Christians practicing biblical financial stewardship, it represents a return on decades of faithful work and contributions you've made throughout your career.

To be eligible for Social Security retirement benefits, you need at least 40 "credits" earned through work, which typically means 10 years of employment where you paid Social Security taxes. If you've worked longer than this (and most near-retirees have), your benefits are calculated based on your highest 35 years of earnings, adjusted for inflation.

Your "Full Retirement Age" (FRA) is crucial to understand. Depending on when you were born, this age ranges from 66 to 67. This is the age at which you can claim 100% of your calculated benefit. But here's where it gets interesting, and where most people don't realize they have choices that can dramatically impact their christian retirement planning strategy.

The Social Security Claiming Spectrum: Your Options Explained

You have a claiming window that spans eight years, from age 62 to age 70. Each choice along this spectrum comes with significant financial implications:

Early Claiming (Age 62-FRA): You can start collecting reduced benefits as early as age 62, but your monthly payment will be permanently reduced by 25-30% compared to waiting until your Full Retirement Age.

Full Retirement Age Claiming: This gives you 100% of your calculated benefit amount.

Delayed Claiming (FRA-70): For every year you delay claiming past your Full Retirement Age, your benefit increases by approximately 8% annually until age 70.

To put this in perspective: If your full retirement benefit would be $2,000 per month, claiming at 62 might give you only $1,400 monthly, while waiting until 70 could increase it to $2,640. Over a 20-year retirement, that's a difference of nearly $300,000 in total benefits.

Social Security's Role in Christian Wealth Management

For believers focused on faith-based financial planning, it's essential to understand that Social Security was never designed to be your sole source of retirement income. On average, Social Security replaces only about 40% of pre-retirement earnings for middle-income workers.

This is where comprehensive christian wealth management becomes crucial. Your retirement income should ideally come from multiple sources:

• Social Security benefits (optimally timed)

• Employer-sponsored retirement accounts (401k, 403b)

• Personal retirement savings (IRAs, Roth IRAs)

• Other investments and savings

• Potential part-time work or ministry income

As Christian stewards, we're called to be wise with our resources. This means viewing Social Security not in isolation, but as one component of a broader legacy planning for christians strategy that considers not just our needs, but our ability to continue giving and potentially leave an inheritance to our children and grandchildren.

Tax Implications: What Many Christians Don't Realize

Here's something that catches many believers off-guard: Social Security benefits can be taxable. Depending on your total retirement income, up to 85% of your Social Security benefits may be subject to federal income tax.

The IRS uses what's called "provisional income" to determine how much of your Social Security is taxable:

• If your provisional income is below $25,000 (single) or $32,000 (married filing jointly), your benefits aren't taxable

• Between these thresholds and $34,000/$44,000, up to 50% of benefits may be taxable

• Above $34,000/$44,000, up to 85% of benefits may be taxable

  
  

This is crucial for Christian financial stewardship because it affects both your take-home income and your ability to give generously. Smart tax planning around Social Security can preserve more of your resources for Kingdom purposes. Matt25 Capital does not provide tax advice; please consult a qualified tax professional for guidance specific to your situation.

Healthcare Costs and Medicare Integration

As part of your christian retirement planning, you must factor in healthcare costs, which typically increase with age. At 65, you become eligible for Medicare, but this doesn't mean healthcare becomes free.

Medicare has several parts:

• Part A (hospital insurance) - usually premium-free

• Part B (medical insurance) - requires monthly premiums

• Part D (prescription drug coverage) - requires monthly premiums

• Supplemental insurance (Medigap) - additional costs

  
  

Many retirees underestimate healthcare expenses. A couple retiring at 65 today can expect to spend approximately $300,000 on healthcare throughout retirement. Planning for these costs is part of being a faithful steward of the resources God has entrusted to you.

A Christian Perspective on Social Security Stewardship

As believers, we often wrestle with questions about tithing and giving from Social Security income. Since you've already paid Social Security taxes (potentially on previously tithed income), there are different perspectives on how to handle tithing from these benefits.

Some Christians choose to tithe on the full amount, viewing it as current income from God's provision. Others tithe only on the portion that exceeds what they contributed, considering their contributions as already-tithed income being returned. The key is to prayerfully consider your approach and remain consistent in your Christian financial stewardship.

Your Social Security decision also impacts your ability to be generous in other ways. Optimizing your benefits may provide more resources for:

• Supporting missions and ministries

• Helping adult children or grandchildren

• Contributing to your church's building fund or special projects

• Supporting charitable causes aligned with your faith

Now Here's What Most People Get Wrong, And It's Costly

This is the most important section of this entire guide. Most people make their Social Security claiming decision based on one or two factors, when they should be considering at least seven critical variables:

1. Life Expectancy and Health Status

If you're in poor health or have a family history of shorter lifespans, claiming earlier may make sense despite reduced monthly benefits. However, if you're healthy and expect to live into your 80s or 90s, delaying can maximize lifetime benefits significantly.

2. Spousal Considerations

Married couples have complex claiming strategies available. The higher-earning spouse's claiming decision affects not only their own benefits but also the surviving spouse's potential benefits. In many cases, the optimal strategy involves one spouse claiming early while the other delays.

3. Current Financial Need

Do you need the income immediately to cover essential expenses, or can your other retirement savings bridge the gap until you can claim higher benefits later?

4. Work Plans

If you plan to continue working past age 62, claiming Social Security early may trigger the "earnings test," which temporarily reduces your benefits if you earn too much from work.

5. Other Income Sources

Your total retirement income picture affects the tax treatment of your Social Security benefits. Sometimes claiming earlier or later can optimize your overall tax situation.

6. Inflation and Future Changes

While Social Security includes annual cost-of-living adjustments, your claiming strategy should consider how inflation might impact your purchasing power over a 20-30 year retirement.

7. Legacy Goals

As part of biblical legacy planning, consider how your Social Security claiming decision affects your ability to preserve other assets for your heirs or charitable giving.

The Critical Mistakes That Cost Thousands

Mistake #1: Claiming at 62 Without Analysis

Many people claim as soon as eligible without understanding the long-term cost. For someone with a $2,000 FRA benefit, claiming at 62 instead of 67 costs about $300 monthly, or $3,600 annually for life.

Mistake #2: Ignoring Spousal Strategies

Married couples who don't coordinate their claiming strategies often leave significant money on the table. Advanced strategies like "file and suspend" are no longer available, but timing coordination remains crucial.

Mistake #3: Not Considering Taxes

Failing to plan for the tax implications of Social Security benefits can result in higher tax bills and reduced spending power in retirement.

Mistake #4: Emotional Decision-Making

Fear about Social Security's future or impatience to "get what's owed to me" leads to sub-optimal claiming decisions. While Social Security does face long-term funding challenges, even worst-case scenarios involve benefit reductions, not elimination.

Your Next Steps: Making the Right Decision

Given the complexity and the permanent nature of many Social Security decisions, this isn't something to navigate alone. As believers committed to christian investment strategies and faithful stewardship, we're called to seek wise counsel.

Here's your action plan:

1. Create your Social Security account at ssa.gov to review your earnings record and benefit estimates

2. Gather your complete financial picture including all retirement accounts, pensions, and other assets

3. Consider your health, family history, and life expectancy realistically

4. Evaluate your spouse's situation if married

5. Run different claiming scenarios to understand the financial implications

6. Pray for wisdom and seek counsel from trusted advisors

Don't Make This Decision Alone

The truth is, optimizing Social Security benefits requires analyzing multiple variables simultaneously, understanding tax implications, and coordinating with your broader christian retirement planning strategy. One miscalculation can cost you tens of thousands of dollars over your lifetime.

This decision is too important, and too permanent, to make without professional guidance.

At Matt25 Capital, we specialize in helping Christians navigate these complex decisions while honoring biblical principles of stewardship. Our comprehensive approach considers not just Social Security optimization, but how your claiming strategy fits into your complete faith-based financial planning picture. We offer estate planning support in coordination with your attorney and tax professional, and tax-aware financial planning; we are not a law firm or CPA firm, and nothing we provide should be construed as legal or tax advice.

We help Christian families maximize their Social Security benefits while maintaining their commitment to faithful stewardship and generous giving. We understand the unique considerations that matter to believers, from tithing questions to legacy goals to supporting Kingdom work in retirement.

Don't leave tens of thousands of dollars on the table. Don't make a permanent decision based on incomplete information.

Contact Matt25 Capital today for a comprehensive Social Security analysis that considers your complete financial picture and Christian values. Together, we'll develop a claiming strategy that honors God, maximizes your benefits, and supports your retirement and legacy goals.

Schedule your consultation today because your future, and your family's, depends on getting this decision right.

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Important Disclosures: This blog post is for educational purposes only and should not be considered personalized investment, legal, or tax advice. Social Security rules are complex and subject to change. All examples are hypothetical and for illustrative purposes only. Securities and advisory services through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth. Matt25 Capital is not a law firm or CPA firm. You should consult with a qualified attorney or tax professional regarding your specific legal or tax circumstances, and consult a financial professional regarding your personal financial situation. Past performance does not guarantee future results. All investments involve risk, including the potential loss of principal.