If you’re a retiree counting on Social Security, you may have noticed that annual adjustments often lag behind inflation, creating a gap in your budget. For 2025, the average retiree will receive just a $49 monthly increase, nowhere near enough to keep up with rising costs. To help bridge this gap, let’s explore three powerful techniques to maximize retirement income and ensure your savings work harder for you.

Resources:

• • FREE RETIREMENT READINESS REPORT
  • Social Security Buying Power Study
  • Here is What a $3m Retirement Portfolio Looks Like

How to Maximize Retirement Income: Closing the Social Security Cost-of-Living Gap

Social Security provides an essential income source for retirees, but recent cost-of-living adjustments (COLA) have left many feeling financially strained. In 2025, the average Social Security income increase is only $49—a small amount when you consider rising inflation. This modest boost falls short in addressing the broader inflationary pressure impacting retirees’ expenses, from groceries to healthcare. Many wonder why Social Security doesn’t fully reflect these rising costs, which makes it essential to maximize retirement income.

Why Social Security Adjustments Aren’t Keeping Pace

The Social Security Administration adjusts benefits yearly based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, this index may not accurately reflect the spending habits and needs of retirees, especially in high-cost areas like healthcare and housing. This discrepancy often leaves Social Security recipients feeling shortchanged. That’s why it’s so important to focus on strategies to maximize retirement income.

Thankfully, there are strategies that retirees can employ to bridge this financial gap. Here are three actionable techniques to help you outpace inflation and maximize your retirement income.

Delay Taking Social Security Benefits

One of the most effective ways to maximize retirement income is to delay claiming Social Security benefits. For each year you delay past your full retirement age (up to age 70), your benefit amount increases by roughly 8%. This strategy may not work for everyone, but if you’re in good health and can rely on other income sources in the meantime, delaying benefits can provide a significantly higher monthly income for the remainder of your life.

Optimize Your Investment Strategy

Another powerful method to maximize retirement income and safeguard against inflation is to review and optimize your investment portfolio. Consider allocating a portion of your assets to investments that tend to outpace inflation, such as stocks or real estate. While stocks come with risks, they historically provide higher returns over time, making them an effective hedge against inflation. Real estate can also generate rental income or appreciate in value, contributing to your retirement income.

If you’re unsure where to start, consult a financial advisor to help balance your portfolio with inflation-resistant assets, ensuring your income has growth potential even as costs increase.

Use a Dynamic Withdrawal Strategy

Traditional withdrawal strategies often recommend taking a fixed percentage each year, but a dynamic withdrawal approach offers more flexibility to maximize your retirement income. By adjusting your withdrawals based on annual market conditions, you can help ensure that your portfolio lasts longer. For example, during years when your portfolio performs well, you can withdraw slightly more. Conversely, in years with low or negative returns, consider withdrawing less to preserve your principal.

This approach requires careful planning and discipline, but it can help you sustain your income over the long haul and reduce the risk of outliving your savings.

Final Thoughts on How to Maximize Retirement Income

Social Security may not keep up with inflation, but with proactive planning and strategic adjustments, you can maximize your retirement income and protect your financial well-being. By delaying benefits, optimizing investments, and using a flexible withdrawal strategy, you can enjoy a more secure retirement and be better equipped to handle rising living costs.

Ready to take the next step? Consult a financial advisor to discuss the best options for maximizing your income throughout retirement.

 

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This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you. Disclosures: https://onedegreeadvisors.com/solutions/#disclosures