At CKS Summit Group, we believe retirees should not rely solely on Social Security for retirement income because it’s designed to be a supplement, not a primary source, and may not be enough to cover all living expenses, especially with rising healthcare costs and potential benefit cuts.
Additionally, the future of Social Security’s funding is uncertain, and relying solely on it exposes retirees to risks they can’t control, such as legal changes or benefit reductions.
Even for HNWI, we also understand how even small changes to Social Security and tax policy can still impact your retirement plan. Two new updates are creating questions for millions of retirees:
- Reduced Social Security checks starting July 2025
- A new $6,000 tax deduction for seniors 65 and older
In this blog, we break down what these changes mean for you, and how proactive planning can help protect your retirement income.
Why Are Social Security Checks Being Reduced?
Starting July 2025, many retirees will see smaller monthly Social Security payments. Why? The Social Security Administration (SSA) is beginning to recoup past overpayments. This means if you were overpaid previously, often due to income reporting errors or administrative miscalculations, the SSA will now withhold 50% of your monthly benefit until the full overpayment is recovered.
What You Can Do:
- Review your Social Security benefits statement. Check your My Social Security account at SSA.gov to confirm your current and correct benefit amount.
- Request a smaller withholding. If losing 50% of your check is unaffordable, you can request a reduced repayment amount.
- File for reconsideration. If you believe you weren’t overpaid, or if repayment creates hardship, you can file to challenge or waive the recoupment.
💬 Advisor Insight: “Many retirees rely heavily on Social Security. If your checks are being reduced, don’t wait – contact the SSA and explore your options to lessen the impact.” – Al Caicedo, President of CKS Summit Group
New $6,000 Senior Tax Deduction
Under recent tax legislation, seniors aged 65 or older will now receive an extra $6,000 tax deduction (or $12,000 for couples). This deduction:
- Is available whether you itemize or use the standard deduction.
- Is based on age, not Social Security status.
- Phases out for joint filers with incomes between $150,000 and $250,000.
While this deduction doesn’t eliminate Social Security taxes, it can help lower your taxable income, reduce your Medicare premiums (due to lower AGI), and provide meaningful tax savings in retirement.
What to Watch: Roth Conversions and Tax Planning
For retirees considering Roth IRA conversions, this deduction presents a planning challenge. Why? If your Roth conversion pushes your income above $150,000, you may lose the deduction entirely. This “tax cliff” makes timing and amount of conversions even more important.
Planning Tip: Model potential conversions carefully. In some cases, converting before age 65 or spreading conversions over multiple years may help optimize your tax outcome.
How CKS Summit Group Can Help
Changes to Social Security and taxes highlight the importance of coordinated planning. At CKS Summit Group, we help clients:
✔️ Understand how benefits and tax laws impact retirement income
✔️ Minimize tax liabilities through strategic withdrawal planning
✔️ Optimize Roth conversions and Social Security claiming strategies
✔️ Identify tax-aware income plans designed for long-term security
Final Thoughts: Stay Proactive, Stay Informed
From benefit reductions to new deductions, retirees are facing complex shifts in how retirement income is taxed and delivered. Don’t navigate these changes alone. A personalized plan can help you avoid surprises and protect your financial future.
📅 Ready to review your Social Security strategy and tax plan?
Schedule a complimentary consultation with CKS Summit Group today.
👉 Visit summitgp.com to get started.
FAQs
Q1: Will all Social Security recipients see reductions?
No. Only those flagged for overpayments will have reduced checks.
Q2: Is the senior tax deduction permanent?
No. It’s temporary and scheduled to expire in 2028 unless extended.
Q3: Can I appeal my Social Security repayment?
Yes. Options include requesting a waiver, reducing the withholding amount, or filing for reconsideration.
Q4: Does the deduction apply if I don’t receive Social Security?
Yes. The deduction is age-based, not benefit-based.
Q5: How can CKS help me with tax planning?
Our advisors work to coordinate your income sources, optimize tax strategies, and help ensure your retirement income is protected from unnecessary taxation.
Disclaimer: This content is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified advisor before making financial decisions.
