Should I Retire Now or Wait 2025? Cash-Flow Test

What Wall Street really screens for before saying “retire now”

Insider secret you won’t hear on the glossy brochures: big institutions don’t start by staring at your nest egg. They start by mapping your first-10-years cash-flow gap and the sequence risk sitting right on top of it. That’s the quiet rule. If your year-one and first-decade cash needs are covered with boring, reliable dollars, the green light gets a lot brighter. If they aren’t, I don’t care if you’ve got $2 million or $8 million, your plan is leaning on hope. And hope is not a cash-flow strategy.

What you’ll see here is simple: we frame retirement as a risk decision wrapped in a cash-flow schedule, not a vibe, not a milestone birthday, not because your co-worker retired last month. The question isn’t “is my balance big enough?” so much as “can I fund the next 10 years without being forced to sell risk assets after a bad year or two?” That’s sequence-of-returns, the silent killer in years 1-10. Over-explaining for a second: if markets crash early, and you’re drawing 4-5% from a shrinking portfolio, the percentage you withdraw effectively jumps, compounding the damage, forcing more sales… you get the idea. Then the point: bad early returns can mathematically lock in losses that a later rebound can’t fully fix.

We’ve seen this movie. The S&P 500 price index fell about 49% from 2000-2002 and 57% in 2008-2009. In 2022 alone, the S&P 500 price return was -19.4% and the Bloomberg U.S. Aggregate Bond Index dropped -13%, rare double pain. That’s sequence risk in real life, not theory. William Bengen’s original work (1994) on the “4% rule” was anchored to nasty starting decades like 1966, when high inflation and flat real returns made early withdrawals perilous.

2025 reality check: yields are higher-for-longer compared with the near-zero era earlier this decade. Cash-like vehicles and short Treasurys are paying several percentage points, materially more than 2020-2021 when many high-yield savings accounts paid close to 0%. That is good news for building a 5-10 year cash-and-bonds runway. But the market path ahead is still uncertain. Earnings growth looks okay in spots, recession risk isn’t zero, and rate cuts, if they show up later this year or next, don’t guarantee a straight line in stocks or bonds. So the should-i-retire-now-or-wait-2025 question comes down to whether your first-decade spending is insulated.

What we’ll tackle next: how to size the year-one and 10-year gap, how many years to lock in with cash and high-quality bonds, and how to avoid forced selling. Quick personal note: I once sat with a client in 2009 who “felt” fine retiring in 2007. The vibe was immaculate. The cash bucket wasn’t. Two very different outcomes. I still think about that meeting… and I triple-check the runway first.

Bottom line: Your retirement start date is a risk call first, a cash-flow schedule second, and only then a portfolio-size brag. The decade ahead, not the next month, decides it.

• The quiet rule: year-one and first-decade cash needs drive the decision more than your total balance.
• Sequence risk in years 1-10 can make or break outcomes.
• 2025 gives you higher yields to build a runway, but the path for markets is still bumpy.
• “Retire now or wait?” is answered with a cash-flow map, not a mood.

Start with the cash-flow gap, not a magic number

Forget the round-number retirement target for a minute. You need a map. Put two lists side by side: what you’ll spend and what shows up reliably. The difference, the gap, is your “retire now or wait” signal.

Step 1: Split spending into three buckets

• Essential: mortgage or rent, utilities, groceries, insurance premiums, meds, taxes, baseline transportation. Be honest, this is the non-negotiable pile.
• Discretionary: dining out, travel upgrades, gifts, hobbies, the golf membership you may or may not use every week.
• One-time launch costs (separate them!): roof replacement, car purchase, big family trip, dental implants, home refresh. These are lumpy, not annual.

Why split it this way? Because essentials determine your sleep-at-night cash need, while one-time items should be funded upfront or staggered, don’t let a roof compete with groceries in year one.

Step 2: List guaranteed or near-guaranteed income and timing

• Social Security: note your ages and start dates. If you delay to 70, you’ll have a bridge period. The gap is real during that bridge.
• Pensions/annuities: amounts, COLAs (if any), and start dates. Some pensions start at 65; some require early-retirement reductions.
• Rental net: after taxes, maintenance, vacancies. Don’t kid yourself, include reserves.
• Part-time income: expected hours and how durable it is.

As of October 2025, you can actually earn something decent on safe assets, 3-6 month Treasury bills have been hovering around the ~5% mark for much of this year, and 1-2 year high-quality bonds are still in the mid-4s in many quotes I’ve seen. That helps fund the bridge without reaching for risk. Rates shift, yes, but the runway is objectively better than it was in, say, 2021 when cash paid near-zero.

Step 3: Size the year-one and 10-year gaps

1. Year-one gap = Essential + Discretionary (excluding one-time) − Guaranteed income starting in year one.
2. 10-year view = Repeat the math, layering in start dates (e.g., pension at 65, Social Security at 67 or 70) and known one-time costs in the years they hit.

Yellow light rule: If the year-one gap requires pulling more than ~5-6% of your total portfolio, that’s a sign to wait, trim spending, or add income. Sequence risk is rude in years 1-10.

Step 4: Lock a shock buffer

• Hold 2-3 years of essential spending in low-volatility sources: cash, T-bills, short Treasuries, high-quality short-duration funds. The goal is simple, avoid forced selling if markets wobble. Earlier this year we saw stocks drop double-digits in a few weeks; that’s normal volatility, not a personal failing.

Quick anecdote, I once penciled a plan where the couple “could” retire if markets were flat for two years. Cute plan. Markets weren’t flat. The updated version held 30 months of essentials in T-bills and short Treasuries, used a modest cash ladder, and pushed Social Security to 68. Same portfolio, totally different risk.

The call: If your bridge period is long (say, you’re 62 and claiming at 70), the gap matters more than the headline nest egg. Nail the map, ring-fence 2-3 years of essentials, and if the math says you’re over that 5-6% withdrawal in year one, that’s your nudge to wait a bit or shave the discretionary line items. Not forever, just until the gap shrinks.

2025 backdrop: rates, markets, and the sequence risk that matters

Here’s the setup right now, no crystal ball required. Rates are still materially higher than the 2020-2021 era. The 10‑year Treasury yield peaked near 5% in October 2023 (Federal Reserve H.15 data showed it flirting around that mark), and while it’s come off that extreme since, the big picture sticks: bond income matters again. Cash isn’t zero either, short T‑bills are still paying in the 4-5% neighborhood as we sit here in Q4 2025 (yields wiggle week to week, but you get the idea). That changes retirement math in a good way if you structure it cleanly.

On the inflation‑protected side, real yields turned positive back in 2022 and stayed there. That’s been the quiet gift. A 5‑ to 10‑year TIPS ladder built at positive real yields (say, ~1.5% to ~2.5% at various points since 2022-2024, depending on maturity and the day’s quote) lets you match near‑term liabilities to inflation without relying on equity markets to cooperate. Not perfect, but way better than the negative real yields we had to tolerate in 2020-2021. I still remember buying TIPS for clients then and feeling like I was paying rent to own ballast.

Sequence risk is still the big villain. It’s not the average return that breaks a plan, it’s the order of returns. Large equity drawdowns in the first 3-5 years of retirement can permanently dent sustainability because your withdrawals lock in losses. You know this, but it’s easy to forget in a good market tape. Earlier this year we had a few weeks where stocks shed double digits, normal, yes, but it’s a reminder that if those weeks hit in your year one or two, the math gets brittle fast.

So, what actually helps? Two things you can control:

• Build a bond/TIPS ladder for 5-10 years of essentials. Think of it as your paycheck replacement. Use a blend of nominal Treasuries and TIPS, laddered by year, to cover the core bills. If you need $80k a year net of Social Security, pre‑fund those years. You can be fancy, but simple works: T‑bills/notes years 1-3, intermediate Treasuries and/or TIPS years 4-10. The key is matching cash flows to spending.
• Keep equities for growth you won’t need for a decade. That’s your inflation kicker and longevity hedge. Don’t yank from equities in down years if the ladder is doing its job. Refill the ladder from equities after good years (harvest gains), not during selloffs.

Small detour, people ask, “Should I retire now or wait?” (yes, I’ve seen should‑i‑retire‑now‑or‑wait‑2025 in my inbox a few dozen times). The honest answer is the rate backdrop gives you more ways to say “yes” safely, but only if your near‑term cash flows are locked down. If you’re depending on a 7% equity return in year one to make the budget work, that’s not a retirement plan; that’s a wish list. If, on the other hand, you’ve got 7 years of essentials in bonds/TIPS and a balanced portfolio behind it, the timing question gets less stressful, because a bad quarter or two doesn’t force you to sell.

Reminder: The 10‑year hitting ~5% in October 2023 wasn’t a party trick; it was a regime change signal. Positive real TIPS yields since 2022 created a window to buy future spending at known, inflation‑linked terms. That’s sequence‑risk insurance you don’t have to overthink daily.

Markets will do what they do. Rates might drift lower later this year or bounce around, fine. What you can anchor is the order of operations: cover 5-10 years of non‑negotiables with a ladder, layer cash for the next 6-12 months (to avoid annoying bid/ask costs), and let equities handle the out‑year growth. I’m not saying equities won’t be volatile; they will. I’m saying you don’t need to care as much about that volatility if your next decade of baseline spending is already spoken for. And yes, I know, easier to type than to watch in real time, but this is the structure that gives you permission to ignore the noise.

Social Security timing: the 8% raise you actually control

Here’s the part of retirement math that feels almost too clean: every year you delay Social Security after your Full Retirement Age (FRA) to age 70, your monthly benefit grows by about 8% per year in delayed retirement credits (SSA rules). That’s not a teaser rate; it’s written into the program. You’re essentially buying more, inflation‑adjusted lifetime income that you can’t outlive. The catch, of course, is you’ll need to draw more from your portfolio in the meantime. So it’s a trade: spend liquid dollars now for bigger guaranteed checks later.

Yes, there’s the earnings test before FRA. If you claim early and keep working, Social Security withholds $1 in benefits for every $2 over the annual limit; in the year you hit FRA, it’s $1 for every $3 over a higher limit (Social Security Administration). And, this is the part people miss, those withheld benefits aren’t lost; your benefit is recalculated at FRA to give you credit for the months withheld. So the “penalty” is mostly timing, not value destruction. That said, cash flow is cash flow; if you need the check now, the withholding can be annoying.

Married? Coordinate. Survivor benefits are based on the decedent’s actual benefit, including delayed credits. In plain English: the higher earner delaying to 70 often raises the floor for both lives, because the survivor (often the spouse with the lower benefit) steps up to the larger check for life. I’ve seen this play out with clients where the extra delay turned a just‑ok retirement into a comfortably funded widowhood. Not fun to think about, but financially important.

Breakeven? Typically your early 80s. If you live past roughly 81-83 (range varies by FRA, claiming age, and COLA), delaying tends to win on total dollars. If health is shaky or family longevity is short, taking earlier can be perfectly rational. If you’ve got longevity in the family, a flexible job, and a portfolio you’re comfortable tapping for a few years, delaying often pencils out. Quick rule-of-thumb: if you can fund the gap with relatively low‑risk assets, cash, short bonds, a TIPS ladder, without crimping essential spending, the 8%/yr plus inflation is hard to beat in risk-adjusted terms.

And a market note since we’ve been talking rates in this piece: real yields are still positive this year, so the opportunity cost of delaying isn’t free, but it’s also not a one‑way street. Compare the guaranteed, inflation‑adjusted increase from Social Security to what your portfolio can reliably earn after taxes and inflation. If your safe bucket is earning, say, low single digits real, swapping a slice of that for an 8%/yr increase in a government‑backed, COLA‑adjusted benefit is a pretty clean trade. I caught myself earlier this year modeling a client’s plan both ways; the version where he delayed and used his TIPS ladder to bridge had lower sequence risk and higher survivor income, even though the account balance looked smaller at 70. That’s the part people react to, the smaller balance, until they see the lifetime cash flow.

One more nuance that’s easy to forget: COLAs apply regardless of when you claim. If you delay, those cost‑of‑living adjustments compound on a larger base once you start, which is exactly what you want covering groceries, Medicare premiums, and property taxes that don’t politely sit still. So don’t frame this as “claim vs. delay” in isolation; frame it as “which mix of guaranteed, inflation‑linked income and invested assets gives me the best odds of sleeping at night?” If the answer involves delaying to 70, you’re not being greedy, you’re buying insurance with a government price tag that still looks pretty good.

Bottom line: Delaying from FRA to 70 can raise your check ~8% per year, survivor benefits get stronger when the higher earner delays, withheld benefits before FRA are recalculated at FRA, and the breakeven is usually early 80s. Health, job flexibility, and your safe‑asset runway are the swing factors.

Taxes in 2025: last year before the TCJA sunset risk

This is the last scheduled year where the 2017 TCJA individual brackets and the doubled standard deduction are still in place. Under current law, they expire after December 31, 2025. Translation: you have a now-or-January decision that isn’t just about Social Security timing; it’s about which year your income shows up on a tax return that might be friendlier. If Congress extends parts of TCJA, great, but I wouldn’t build a retirement plan on a maybe. I’ve sat in too many year-end tax meetings where “maybe” turned into “oops.”

Why it matters: TCJA lowered rates (top marginal rate at 37% vs. 39.6% pre-2018), widened brackets, raised the standard deduction, and capped SALT at $10,000. If the sunset happens in 2026, the top rate is scheduled to move back to 39.6%, brackets compress, the standard deduction shrinks, and personal exemptions reappear. Not every household gets hurt, but a lot of upper-middle-income retirees do when RMDs kick in and capital gains stack on top.

So what to actually do this year? Two buckets: accelerate income you control and shape the bracket you land in.

• Pull income into 2025 where it makes sense. If you’re retiring in Q1 and can take a bonus, deferred comp, or a consulting check in December instead of January, modeling might show a better outcome in 2025’s brackets. Same goes for realizing a chunk of long-term gains while the 15% band is still fairly wide for many filers.
• Accelerate Roth conversions. Pre-RMD years are gold for bracket management. SECURE 2.0 moved the RMD age to 73 starting in 2023. If you’re 65-72, you may have multiple “low-ish” years to convert IRA dollars at 12%, 22%, or 24% brackets. Paying 22% now to avoid 28% or 33% later (post-sunset) can be a very boring but very good trade.
• Qualified charitable distributions (QCDs). From age 70½, you can send IRA money directly to charity and exclude it from income. That trims future RMDs and can sidestep itemization hurdles. With the standard deduction still high this year, QCDs often beat writing a check from your bank account.
• Mind the surtaxes. The 3.8% Net Investment Income Tax applies when modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly), and the 0.9% Medicare Additional Tax hits wages above the same thresholds. If you harvest gains or accelerate income, model these cliffs first, turning a 15% capital gain into 18.8% is a surprise you can avoid.

Quick market tie-in: after last year’s mega-cap run and this year’s choppier tape with rates bouncing around, a lot of folks are sitting on uneven gains across sectors. Don’t just sell “the winners” without a plan, harvest gains and losses in pairs, and run the NIIT math before you hit sell. I know, spreadsheets aren’t a hobby, but this is where a 30-minute model can save five figures in lifetime tax.

Circling back to Social Security for a sec: delaying to 70 still makes sense for many, but that doesn’t mean you delay everything. You can delay the check while pulling IRA dollars forward into 2025-2026 via conversions. Same idea, said a bit differently: build guaranteed income later, but build tax flexibility now.

Bottom line: 2025 is a “use it or maybe lose it” year for lower TCJA brackets. Consider accelerating income and Roth conversions while you’re pre-RMD at 73, use QCDs from 70½ to shrink future RMDs, and stress-test NIIT and Medicare surtaxes before you harvest gains. Plans beat hopes, and taxes reward the boring planners.

Healthcare bridge math: ACA subsidies, COBRA, and IRMAA gotchas

Here’s the part a lot of “should I retire now or wait in 2025?” conversations hinge on, healthcare. If you’re not 65 yet, the difference between full-price premiums and properly managed ACA subsidies can be five figures a year. The Inflation Reduction Act (2022) kept the enhanced ACA credits through the end of 2025, which means the benchmark Silver plan is capped at about 8.5% of household income with no hard 400% FPL cliff. Translation: income management matters, massively, for anyone pre‑Medicare.

Quick framing with real numbers so this isn’t abstract: the 2024 Federal Poverty Level (used for many 2025 marketplace determinations) is $15,060 for a single and $20,440 for a couple in the contiguous U.S. That means 250% FPL for a couple is about $51,100 and 400% FPL is ~$81,760 (HHS, 2024). Stay near those bands and your net premiums can drop sharply, especially because cost-sharing reductions are richest from 100%-150% FPL and still meaningful up to 250% FPL. And since the enhanced credits removed the old cliff through 2025, even incomes above 400% FPL still get help if the benchmark premium would exceed that 8.5% cap.

COBRA is the other common bridge. You typically get 18 months after job loss. It’s familiar doctors, easy to elect, and, yes, often pricey. Don’t just compare sticker prices; compare total annual cost after ACA subsidies. Example I see a lot: a couple with $95k MAGI paying COBRA at full freight might be better off dialing MAGI down into the mid‑$70ks by sequencing withdrawals and capital gains timing, then taking an ACA plan with meaningful net savings. It’s not always glamorous. It is math.

Medicare’s IRMAA is the delayed curveball. Premium surcharges use a two‑year lookback, so your 2023 MAGI determines your 2025 Part B/D brackets, and 2024 MAGI hits 2026. A single spike, option exercise, business sale, big Roth conversion, can add hundreds per month for a full year or more. There’s an appeal (SSA‑44) if you had a qualifying life‑changing event like retirement, marriage, divorce, or loss of income. But “I converted too much” isn’t a qualifying event. I’ve had to explain that one after the fact, never fun.

One more thing, and I say this as someone who’s messed this up once with a client calendar, part‑time work can be a feature, not a bug. If you can structure hours or 1099 work to keep Modified AGI in a target subsidy lane, you buy both cash flow and cheaper healthcare. Earning $25k might sound “safer” than $18k, but if it bumps you out of a richer subsidy and you’re paying the extra back at tax time, net after healthcare can be worse. Slightly counterintuitive, I know.

Action steps I’d sanity‑check for Q4 2025:

• Price ACA vs. COBRA side‑by‑side using your projected 2025 MAGI. Stress test a range: +/- $10k income.
• Use the enhanced ACA cap (8.5% of MAGI for the benchmark Silver, through 2025) to set an income target, not just a budget.
• Sequence cash: spend taxable cash first, use basis in brokerage, harvest losses, keep Roth taps as a last resort if you’re chasing subsidies.
• Plan Roth conversions intentionally: big 2025-2026 conversions can raise 2027-2028 IRMAA. Model the after‑IRMAA cost, not just the tax bracket.
• If retiring this year, bookmark SSA‑44 for a potential IRMAA appeal tied to the retirement date.
• Consider part‑time or consulting with levers, defer invoices into January if you’re near a subsidy cliff, or pull them into December if you need the cash and the math still works.

Healthcare is where “wait a year” sometimes wins. Other times, especially with market yields where they are and equities still choppy, you can retire now and keep MAGI in the sweet spot. It’s not black‑and‑white; it’s a budget, a tax return, and a few what‑ifs on a single spreadsheet. I’ll take boring math over regret two years later when IRMAA shows up on the bill.

So…retire now or wait? A weekend decision framework you can run

So… retire now or wait? A weekend decision framework you can run

Alright, here’s the short version I give clients when they text me on a Saturday morning after coffee and a Zillow binge. If you can clear these checks today, retiring now is reasonable. If not, set a short runway and fix the gaps. And, yeah, I’ve run this same checklist on myself more than once when markets wobble.

1. Run a 12‑month cash plan. List essential expenses only, housing, food, insurance, taxes, medical, basic travel, etc. Fund those from cash and short bonds, not equities. If you can’t cover two full years of those essential expenses without selling stocks, build that first. With equity volatility still jumpy this year and yields decent on T‑bills and CDs, this is not wasted carry. Think of it as your sleep fund.
2. Stress test two bad years up front. Model a −20% hit to equities on day one and assume bonds are flat. If the plan breaks (you’d have to sell stocks at losses to eat), either delay or trim spending 5-10%. It’s boring, yes, but boring math beats panic-selling. If you want a sanity check: a 60/40 that takes −12% in year one and −3% in year two isn’t unrealistic, we’ve all seen that movie.
3. Pick your Social Security month on purpose. Model three cases: claim now, claim at 67 (Full Retirement Age for many), and claim at 70. Remember the mechanics: benefits grow about 8% per year from FRA to 70 due to delayed retirement credits, and survivor benefits tie to the higher earner’s benefit. If a spouse would rely on your check, that delayed start often pulls extra weight in the plan.
4. Do a 2025 tax pass. Run a partial Roth conversion up to, not through, the next federal bracket or Medicare IRMAA tier. And consider realizing some long‑term gains this year while 2025 brackets are still TCJA-era; many expect higher ordinary brackets in 2026 when parts of TCJA are scheduled to sunset. Quick reminder: capital gains stack on top of ordinary income for bracket placement, so sequence matters. And if you retired this year, keep SSA‑44 handy for an IRMAA life‑event appeal.
5. Price healthcare three ways. Get actual quotes for: (a) COBRA, (b) an ACA Silver plan with subsidy estimates based on your projected 2025 MAGI, and (c) any employer retiree plan. Compare on an after‑tax, after‑subsidy basis including deductibles, HSA eligibility, and the real out‑of‑pocket max. Small detour, people underbudget this line constantly. A $600/month premium with a $9,000 family OOP max can be cheaper in a bad year than a $350 premium plan with a weak network and a sky‑high OOP. Okay, back.

Make the go/no‑go call

• If you pass the 12‑month cash plan, the two‑year cash bucket, the stress test, and the healthcare pricing looks sane, retiring now is defensible. Equities are still choppy in 2025 and bond yields are decent enough that cash/bond ladders do real work again. I’m actually excited about that, which is a nerdy sentence, I know.
• If you don’t, set a 6-12 month runway and fix it fast.

Your 6-12 month runway checklist

• Build the income ladder: accumulate 24 months of essential expenses in cash, T‑bills, CDs, or short high‑quality bonds. Keep equities for years 3+ spending.
• Finish key Roth conversions in 2025, and maybe early 2026, but model IRMAA for 2027-2028, today’s conversions can bounce back as higher Medicare premiums in two years. Do the math on the after‑IRMAA cost, not just the tax bracket.
• Pay off any high‑rate debt. If it’s above your safe withdrawal rate hurdle or above your bond yield, retire the debt. I once watched a client carry a 9% HELOC while sitting on a pile of cash. Don’t be that guy; I was that guy once with a 0% card that wasn’t actually 0% after fees. Oops.
• Rehearse your retirement budget for 90 days. Live on the planned number now. If you can’t, the spreadsheet is lying to you. Adjust before you hand in the badge.

Rule of thumb I use: if a −20% stock hit on day one doesn’t change next year’s spending or force taxable events you don’t want, you’re probably close to “go”. If it does, buy time, not risk.

Final nudge: document the exact month you’ll claim Social Security and why, the tax brackets you’re targeting for 2025 conversions, and the health plan you’ll start on January 1 if you stop working this quarter. Put it on one page. If you can read that page without flinching, the answer to “should I retire now or wait” is right there.

Frequently Asked Questions

Q: How do I figure out if I can retire now without getting crushed by sequence risk?

A: It’s a bit messy, but here’s the practical checklist I use with clients: 1) Map your first 10 years of spending: annual core spend + taxes + health care + one-offs (roof, car, kid’s wedding). 2) Subtract reliable income (pension, Social Security if you’ll take it, existing annuities). 3) Fund the gap with boring dollars: cash, CDs, T‑bills, short Treasurys, and a TIPS ladder. Aim to fully cover years 1-5 and mostly cover years 6-10. Keep 12-24 months in true cash equivalents. 4) Stress-test: can you meet spending if your risky assets drop 30-40% in year one and don’t recover for 3-5 years? If not, you’re leaning on hope, and hope isn’t a cash‑flow strategy. In 2025, higher-for-longer yields mean your “boring dollars” can actually earn low-to-mid single-digit yields, which helps. Also add guardrails: cut withdrawals ~10% after a down year, give yourself a raise after strong years. If your 10-year gap is funded and the stress test passes, retiring now is usually fine. If not, wait, trim spending, or build more safe income first.

Q: What’s the difference between a cash bucket and a TIPS ladder for the first decade?

A: Cash bucket: 1-3 years in savings, money markets, CDs, T‑bills. Pros: super liquid, simple, minimal price swings. Cons: reinvestment risk if rates fall, inflation bite over multiple years. TIPS ladder: buy individual TIPS maturing each year for years 1-10 (or 1-7), so maturity proceeds fund that year’s spending in inflation-adjusted terms. Pros: inflation protection, known real cash flows if held to maturity. Cons: a bit more setup, tax complexity in taxable accounts (phantom income), and less flexibility if plans change midstream. Many folks pair them: 1-2 years cash, years 3-8 in a TIPS/short‑Treasury ladder, equities for growth behind that. Simple, durable, and it keeps you from selling stocks after a bad year.

Q: Is it better to claim Social Security now or build a Treasury ladder and delay?

A: If your health and longevity expectations are average or better, and you’ve got assets to bridge, building a short Treasury/TIPS ladder to delay benefits often wins. Delaying from full retirement age to 70 increases your benefit about 8% per year (set by law, not markets). The rough breakeven for delaying into 70 is around age 80-82. 2025 yields make the bridge more palatable because your ladder actually earns something. Watch taxes and Medicare IRMAA brackets, sometimes doing partial Roth conversions during the bridge years improves lifetime after‑tax income. If you have poor health or low assets, claiming earlier can be rational. Run the numbers both ways with taxes included before deciding, rules of thumb get you close, but taxes can flip the answer.

Q: Should I worry about the 4% rule in 2025, or is there a better approach?

A: Treat 4% as a starting signpost, not a law. The original 4% research was stress-tested against ugly starting decades; it’s useful, but your plan benefits from tweaks. Alternatives I like in 2025: 1) Guardrails (e.g., start near 3.8-4.5% but cut 10% after bad years, give yourself a raise after strong years). 2) Floor‑and‑upside: secure 10 years (or a lifetime floor) with TIPS/short Treasurys and possibly a small SPIA/QLAC, then let equities be the upside. 3) Dynamic withdrawals tied to portfolio value bands (withdraw, say, 3-5% within caps). 4) Partial annuitization for essential expenses to reduce sequence risk. Any of these beats a fixed withdrawal that ignores market reality. If your safe-income floor covers the first decade, even a 4%ish starting point feels a lot less scary. And yeah, I know, none of this is sexy, but boring tends to win here.

@article{should-i-retire-now-or-wait-2025-cash-flow-test,
    title   = {Should I Retire Now or Wait 2025? Cash-Flow Test},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/retire-now-or-wait-2025/}
}