I'm a Financial Adviser: This Is How You Can Adapt to Social Security Uncertainty

Rather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible Social Security changes like gradual benefit adjustments, a higher full retirement age (FRA) or means testing/payroll tax expansion.

By Will South, NSSA®, CFP®

published 14 December 2025

in Features

An older couple work on financial planning together at their kitchen table.

The Social Security trust fund that pays benefits to retirees is projected to face a shortfall by 2033, according to the latest report from Social Security's Board of Trustees. At that point, payroll taxes would cover only about 77% of promised benefits.

The headlines sound dire, but for affluent retirees, panic isn't a plan.

Each of the fixes being debated in Washington — raising the full retirement age, reducing benefits for higher earners or increasing payroll taxes — impacts income and taxes differently.

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About Adviser Intel

The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

The best response for a retiree isn't to guess which one passes. It's to build a retirement income strategy that is flexible enough to adapt to any outcome.

Here's a look at each possible solution and how you might plan for it.

The three most likely reform paths

1. Gradual benefit adjustments for future retirees

Lawmakers are reluctant to reduce benefits for those already receiving Social Security. More likely is a phased reduction or slower cost-of-living adjustments (COLAs) for future retirees, similar to proposals analyzed by the Congressional Budget Office.

Even a modest 5% to 10% benefit reduction could trim lifetime payouts by more than $100,000 for higher earners who live into their 90s.

How you can plan: If you are still working or delaying benefits, stress-test your plan for smaller payments starting at age 70 or later.

Coordinate your claiming age with your tax strategy to avoid the "widow's penalty," when a surviving spouse moves from married to single filing status and pays higher taxes on less income. You can learn how to avoid it in the Kiplinger article How One Widow Nearly Missed Out on $213,000 in Social Security.

2. Higher full retirement age (FRA)

A realistic reform is nudging the full retirement age upward for younger people, as Congress did in 1983 when it raised FRA from 65 to 67 and phased it in over decades for future retirees.

Similar proposals today also phase changes in gradually by birth year.

If FRA ultimately moved to 68, a retiree still claiming at 67 would be filing 12 months early, about a 6.7% reduction under current rules.

If FRA moved to 69, claiming at 67 would be 24 months early — about a 13.3% reduction.

The last time FRA changed, the law was enacted slowly over a 22-year phase-in, which is a fair planning assumption now.

How you can plan: Maintain your options with bridge income so you can delay claiming if the rules change. Cash reserves, a taxable brokerage or withdrawals from retirement accounts can cover living costs while you wait.

Choosing which account to tap in which year is a key lever for managing Medicare's IRMAA surcharges and future required minimum distribution (RMD) exposure, especially in years when income would otherwise spike. (Use your plan's scenario model to test "FRA + one year" and "FRA + two years" cases alongside IRMAA brackets.)

3. Means testing or payroll tax expansion

If Congress pursues "means testing," higher-income retirees could see reduced benefits, while those earning over $400,000 might face payroll tax reinstatement on income above that level.

These changes would effectively raise the marginal tax cost of additional earned income in retirement.

How you can plan: Take advantage of today's historically low federal tax brackets, set by the One Big Beautiful Bill Act (OBBBA) and in place until Congress changes them.

Now is a critical window for Roth conversions. Consider using this window to make modest Roth conversions each year, often between ages 59½ and 73, to fill the lower tax brackets.

Converting strategic amounts annually can shrink future RMDs, reduce IRMAA surcharges and build tax-free income flexibility if benefits are taxed more heavily later.

A case study: The 'future-proof' plan

Consider a couple, both age 62, with $1.2 million in IRAs, $400,000 in a taxable account and $60,000 in annual spending needs.

If they claim Social Security at 62, they'll receive roughly $42,000 per year. If they delay until 70, their combined benefit grows to about $74,000.

We modeled three possible outcomes:

No policy change. Lifetime Social Security benefits total about $1.9 million
10% benefit reduction beginning in 2033. Lifetime benefits fall to $1.7 million
Targeted reform (reduced COLA or means-testing for higher earners). Lifetime benefits land near $1.65 million, depending on income thresholds

By covering the eight-year delay from their investable accounts and layering $50,000 to $100,000 in annual Roth conversions, they can lower future RMDs, reduce IRMAA exposure and preserve flexibility across any policy outcome.

Behavioral guardrails that matter

Keep fixed costs low. Flexibility starts with manageable expenses. Housing and health care absorb the largest shares of retiree budgets.
Diversify tax sources. Aim for a blend of taxable, tax-deferred and tax-free accounts so you can control your effective tax rate each year.
Plan in what-ifs. Ask your adviser to model multiple policy outcomes — reduced COLAs, higher FRA or partial means testing. Seeing the numbers reduces anxiety and increases confidence in your long-term strategy.

A 20% across-the-board cut may grab headlines, but it's politically improbable. Smaller, targeted adjustments are more likely and manageable for retirees who plan ahead.

The next decade is a rare window to reshape where your income comes from and how it's taxed.

This information is for educational purposes only and does not constitute individualized financial, tax, or legal advice. Please consult a qualified professional regarding your specific situation.

Investment advisory services offered through Fiduciary Capital, Inc., a state-registered investment advisor. Will South is a licensed insurance professional in Georgia. Not affiliated with or endorsed by the Social Security Administration, Medicare, or any other government agency.

Past performance is no guarantee of future results.

The case studies provided do not reflect actual clients. Any reference to securities is based upon historical data that is public sourced. No statement made herein is to suggest stock market performance or future performance, and no case study is used to imply future performance. The case studies are intended to illustrate services available through the adviser. Actual results will fluctuate with market conditions and will vary over time.

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Will South, NSSA®, CFP®, is a financial adviser with RichLife Advisors, where he helps retirees and pre-retirees build confident, tax-efficient income plans designed to last a lifetime. A National Social Security Advisor certificate holder and Series 65 investment advisor representative, Will specializes in retirement tax strategies, Roth conversion planning, and Social Security optimization. He has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) designation and brings a values-driven, fiduciary approach to every client relationship — empowering families to retire on purpose, not by accident.