With the stock market down 25% over the past year and Social Security payments rising to a maximum benefit of $4,485 in January, even wealthy clients’ are starting to pay much closer attention to Social Security, advisors say.

Simply put, rising benefits gives investors more options when creating an optimal retirement funding strategy.

“If you’re a millionaire and have most of your wealth invested and you’ve seen that wealth go down in the stock market, Social Security is coming in as an important source of income in your overall plan," Susan Mitcheltree, a partner at Berman McAleer in Baltimore, said.

The recent cost of living adjustment (COLA) “is a considerable increase from what we’ve been seeing, especially from the years when we didn’t have any meaningful increases because inflation adjustments were so low. In the inflationary environment we’re in, we needed to see it come up,” Mitcheltree said.

The Social Security Administration announced the 8.7% COLA on October 18. It's the biggest increase since 1981, when the COLA hit 11.2%, and reflects ongoing inflation in the U.S., which was down slightly to 8.3% in October based on a rolling calculation of prices over the prior 12 months.

Social Security benefits increasing significantly gives investors more options when it comes to deciding what assets to tap first to maximize and extend the longevity of a retirement portfolio, advisors said.

Especially with the market in decline, “Social Security is the only instrument that lasts as long as you do, goes up with inflation as we just saw and there are no commissions or fee. You can never run out,” Jeremy Keil, founder of Keil Financial Partners in New Berlin, Wisc., said.

Keil said his firm always runs the numbers to show clients all of their options when it comes to deciding when to start benefits. “If you can wait until age 70, you’ll be able to grow your benefits by 8% a year, which means you’ll earn roughly an extra $100,000 tax-free by age 70, so we very much encourage waiting on a higher benefit,” Keil said.

But for couples who both have earned Social Security benefits, “a lot of times we like to let the opinions and feelings of the client dictate what they want to do with the smaller benefit,” Keil said. There are “definitely” clients who feel they do not want to cash in their investments with stocks down 25%, he added.

“If your portfolio is down 25% and it gets back to even in three years, that will beat even the 8% growth in Social Security benefits that will accrue if you wait until age 70 to begin taking benefits,” Keil said.

So, for some people, especially those who have a spouse with richer Social Security benefits, tapping their own, lesser benefit early can make sense—especially if they’ll invest the proceeds. “When you have couples who will both retire early, sometimes a bird in the hand is worth two in the bush, because it can make sense for one to claim early to get an income stream started and invest the monthly payment using a strategic investment strategy,” Mitcheltree said.

Tapping the Social Security benefits of one spouse can also mean that’s less income they need to take from their portfolio, even if they’re not actively investing the benefit, “so It can work out to have similar benefits,” she added.

Keil said he finds that clients retire earlier than they expect and live longer than they estimate. To help them understand the cost of these likelihoods, he runs their Social Security and longevity projections to show them how much waiting until age 70 to claim benefits will provide.

But he also encourages clients to run their own life expectancy numbers on www.longevityillustrator.org, which can produce eye-opening results, he said.

“What’s important is that it is based on math and science and not feelings. Feelings regarding longevity are almost always wrong,” Keil said. The projections can also help clients from jumping the gun on claiming their Social Security benefits early, when often they do not need to.

Calculating joint life expectancy using the tool is a particular eye-opener for couples. “You can say you’ll live to age 75 and your spouse may live until 80, but typically one partner will live three to five years longer and we help people plan for that,” the veteran advisor said.

“For most clients, we say, ‘Let’s do Social Security bridging until age 70 and based on the planning we’ve done for you for years, here is what your income will be.’ I have never had a widow tell me she needs less income,” Keil added.