Happy 90th Birthday, Social Security: Why Now is the Time for Strategic Retirement Planning
August 14, 2025 marked a historic milestone: Social Security turned 90 years old. Since President Franklin D. Roosevelt signed it into law in 1935, Social Security has provided financial stability to hundreds of millions of Americans. Today, nearly 70 million retirees, disabled workers, and survivors depend on it. As we celebrate its 90th birthday, it’s the perfect moment for pre-retirees and retirees to take a serious look at their retirement strategy. Specifically, this means planning for when to take Social Security, preparing for Medicare, and implementing a tax-efficient Roth ladder conversion strategy.
In this article, we’ll break down what the 90th birthday of Social Security means, explore recent legislative changes (including the Big Beautiful Bill), explain the $6,000 annual Social Security tax deduction (including income thresholds), address Medicare’s two-year lookback rule, and discuss how retirees can protect their income in light of potential OASI trust fund depletion. We’ll also look at political efforts to shore up Social Security, provide real-life case studies for couples, and show how smart Roth conversion planning can reduce your lifetime tax burden by over 43%.
A Legacy of 90 Years: Social Security’s Past and Future
Since its inception, Social Security has served as the backbone of retirement income for millions of Americans. What started as a simple retirement safety net has evolved into a comprehensive program providing:
- Retirement benefits
- Disability benefits
- Survivor benefits
- Supplemental Security Income (SSI)
As of 2025, Social Security pays benefits to almost one in five Americans. But the program faces challenges. With an aging population and declining worker-to-beneficiary ratios, the Old-Age and Survivors Insurance (OASI) Trust Fund is projected to be depleted by 2035 if no reforms are made. When that happens, incoming payroll taxes would cover only about 77–80% of scheduled benefits.
This makes retirement planning today more crucial than ever. While Social Security will not disappear, retirees must prepare for potential adjustments in benefits, taxation, or eligibility.
The Big Beautiful Bill: Strengthening Retirement Security
One of the most significant legislative changes to Social Security and retirement planning came with the signing into law of the Big Beautiful Bill. Among its key provisions:
- $6,000 Annual Deduction for Social Security Benefits: Retirees can now deduct up to $6,000 per person from their taxable income related to Social Security benefits. For married couples filing jointly, that deduction doubles to $12,000.
- Income Thresholds for the Deduction:
- Single Filers: The full $6,000 deduction is available for retirees with a Modified Adjusted Gross Income (MAGI) up to $85,000. The deduction phases out between $85,000–$105,000, disappearing entirely above $105,000.
- Married Filing Jointly: The full $12,000 deduction is available for couples with MAGI up to $170,000. The deduction phases out between $170,000–$210,000, disappearing entirely above $210,000.
- Encouragement of Roth Ladder Conversions: By providing this deduction, the bill incentivizes retirees to strategically convert traditional IRA/401(k) assets to Roth IRAs while managing taxable income to stay under the phase-out limits.
This deduction effectively reduces retirees’ tax burdens, helping them keep more of their Social Security income. But it also demands careful planning. For example, converting too much to a Roth in a given year could push income above the deduction threshold, reducing or eliminating the benefit.
Case Study #1: Maximizing Social Security for a Couple
Consider John and Mary, both age 62. John is the higher earner with a projected full retirement age (FRA) benefit of $2,800 per month. Mary’s FRA benefit is $1,200 per month.
- If both claim at 62, they would lock in reduced benefits: John at about $2,100 and Mary at $900. Together, $3,000 per month.
- Instead, John delays benefits until age 70, increasing his benefit by 8% annually from FRA. At 70, he receives about $3,696 per month.
- Mary claims at her FRA of 67, receiving $1,200 per month.
By delaying, their combined benefit at 70 is $4,896 per month versus $3,000 had they both claimed early. Over a 25-year retirement, this decision could add hundreds of thousands of dollars in additional lifetime benefits. Most importantly, if John passes away first, Mary keeps the higher benefit ($3,696), ensuring long-term survivor security.
This shows why couples should coordinate timing—one spouse may claim earlier for income, while the higher earner delays to maximize survivor benefits.
Strategic Roth Ladder Conversions: Deleting the IRS from Your Retirement Accounts
A Roth ladder conversion involves gradually converting portions of your traditional IRA or 401(k) into a Roth IRA over several years. Why do this?
- Tax-Free Growth and Withdrawals: Once assets are in a Roth IRA, they grow tax-free, and qualified withdrawals are never taxed.
- No Required Minimum Distributions (RMDs): Unlike traditional IRAs, Roth IRAs don’t force you to take taxable distributions starting at age 73.
- Estate Planning Benefits: Heirs can inherit Roth IRAs with tax-free distributions (subject to 10-year withdrawal rules).
- Maximizing the $6,000 Deduction: By controlling the amount you convert each year, you can balance taxable income to stay under the Social Security deduction thresholds.
Timing is Essential: It is now more important than ever to begin your Roth ladder conversion the year after you stop working and aim to finish before you turn 73 years old, when RMDs begin.
Case Study #2: Saving 43.6% in Taxes with a Roth Ladder Conversion
Let’s take another example. Bill and Susan retire at age 62 with $1,000,000 in their traditional IRA. If they do nothing, RMDs beginning at age 73 could push them into higher tax brackets, increase Medicare surcharges, and reduce the value of the $12,000 Social Security deduction.
Instead, they implement a 12-year Roth ladder conversion plan, converting about $90,000 per year from ages 62–73. Here’s what happens:
- They gradually shift $1,000,000 into a Roth IRA over 12 years.
- By staying under phase-out thresholds, they preserve their annual $12,000 Social Security deduction.
- They reduce their future RMDs to nearly zero, dramatically lowering taxable income in retirement.
- They use taxable account assets to pay the taxes on each conversion. This allows them to move 100% of their IRA funds dollar-for-dollar into a Roth IRA, converting qualified, tax-deferred money into TAX-FREE MONEY without reducing the IRA balance itself.
Result: Over a 35-year retirement, Bill and Susan pay 43.6% less in lifetime taxes compared to doing nothing. This amounts to hundreds of thousands of dollars in savings—money that stays in their pockets, not the IRS’s.
This illustrates why acting early and being strategic is critical. The window between retirement and age 73 offers the best opportunity for Roth conversions.
Case Study #3: Using a Roth for Lifestyle Freedom
Imagine Tom and Linda, a couple in their late 60s, who dream of taking a $25,000 Viking River Cruise through Europe. If they withdraw that $25,000 from their traditional IRA, they face taxes:
- 15% Federal = $3,750
- 5% Georgia State = $1,250
- Total Taxes = $5,000
So, instead of a $25,000 cruise, they must withdraw $30,000 to cover both the trip and the taxes.
Now imagine Tom and Linda had executed a Roth ladder conversion strategy in earlier years. If they withdraw the same $25,000 from their Roth IRA, the tax bill is 0%. They pay exactly $25,000 for the cruise, with no hidden tax cost.
The difference is stark: Roth planning gives retirees more freedom to enjoy their retirement without worrying about taxes draining their dreams.
Medicare’s Two-Year Lookback: Planning Ahead for Health Costs
Another critical piece of retirement planning involves Medicare. While most retirees know that Medicare eligibility begins at 65, fewer understand how premiums are calculated.
Medicare uses a two-year lookback on income to determine whether retirees must pay income-related monthly adjustment amounts (IRMAA). Higher-income retirees face surcharges on Parts B and D. For example:
- If you retire at 65 in 2025, Medicare will look at your 2023 income.
- Large Roth conversions, capital gains, or other taxable events in the two years prior can increase premiums significantly.
Planning Tip: Coordinate Roth ladder conversions and Social Security claiming strategies with Medicare’s two-year lookback. Converting too much in one year could raise your Medicare premiums for two years. Working with a fiduciary advisor can help optimize timing.
The OASI Trust Fund: Depletion Risks by 2035
One of the most pressing issues in retirement planning is the solvency of Social Security. The OASI Trust Fund—which pays retirement and survivor benefits—is projected to be depleted by 2035. Without reforms, benefits would be cut by about 20–23%.
This doesn’t mean Social Security will vanish. Payroll taxes will continue to flow in, covering most benefits. But retirees should prepare for the possibility of reduced payments.
That makes Roth ladder conversions, private savings, and other income streams (annuities, pensions, investments) more important than ever. Retirees cannot rely solely on Social Security.
Political Efforts to Strengthen Social Security
The future of Social Security will depend heavily on political action. President Donald Trump and Republican leaders have pledged to fortify Social Security. Key proposals include:
- Protecting Benefits for Current Retirees: Ensuring no cuts to those already receiving Social Security.
- Payroll Tax Adjustments: Considering gradual increases to ensure long-term solvency.
- Economic Growth Strategies: Strengthening the labor force and growing wages, which would in turn increase payroll tax revenue.
- Preservation of the Social Security Deduction: Keeping the $6,000/$12,000 deduction intact to provide retirees with tax relief.
While political debates continue, the consensus remains: Social Security must be preserved and protected for current and future retirees.
Why Now is the Time to Plan
As Social Security turns 90, retirees and pre-retirees face both opportunities and challenges. The Big Beautiful Bill has provided valuable deductions and incentives, but the looming depletion of the OASI Trust Fund and Medicare’s two-year lookback demand proactive planning.
Here’s what retirees should do now:
- Map Out Social Security Claiming Strategies
- Decide the best age to claim based on health, longevity, and household needs.
- Consider delaying to maximize benefits, especially for the higher-earning spouse.
- Implement Roth Ladder Conversions
- Begin conversions the year after you stop working.
- Keep taxable income under the Social Security deduction phase-out thresholds.
- Aim to complete conversions before age 73.
- Use taxable account assets to pay conversion taxes, so you move IRA dollars to Roth dollar-for-dollar.
- Plan for Medicare
- Understand the two-year lookback.
- Avoid large income spikes before or after age 65.
- Diversify Income Sources
- Don’t rely solely on Social Security.
- Consider annuities, pensions, and investment income.
- Stay Informed on Policy Changes
- Follow legislation like the Big Beautiful Bill.
- Monitor Social Security reform proposals.
Conclusion: A 90-Year Legacy, A Call to Action
Social Security’s 90th birthday is both a celebration and a wake-up call. For nine decades, it has provided security and dignity to retirees. But with trust fund depletion on the horizon and healthcare costs rising, retirees must take control of their future.
By carefully planning Social Security claiming strategies, leveraging the $6,000/$12,000 deduction (with income thresholds), implementing Roth ladder conversions using taxable assets to cover taxes, and preparing for Medicare’s two-year lookback, retirees can build a resilient, tax-efficient retirement plan. Case studies show how couples can maximize lifetime benefits, save nearly half in taxes, and even enjoy travel dreams without tax surprises.
Now is the time to act. Social Security may be 90 years old, but your retirement strategy should be fresh, proactive, and designed to withstand the next 30 years or more.
About the Author: Ford Stokes, RSSA®, MBA
Ford Stokes is the Founder and CEO of Active Wealth Management and Retirement Results. He is a Registered Social Security Analyst® (RSSA®), an MBA, and the author of The Smart Retirement Plan, recently published and available on Amazon, Kindle, and Audible. Ford is also the host of the Retirement Results Radio Show, the most listened-to retirement show on AM 920 The Answer every weekend. He and his team specialize in helping retirees and pre-retirees reduce risk, minimize taxes, and build retirement strategies that stand the test of time.
Act Now, Don’t Wait!
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- Maximize your Social Security benefits.
- Implement a tax-saving Roth ladder conversion strategy.
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