This important question comes up in conversations about the strategy for required minimum distributions, or “RMDs.”
By Jeff Herman
But first, some background. Claiming Social Security at 62 may provide income sooner, while waiting can increase your monthly benefit up to age 70. The right choice depends on your health, income needs, other resources, tax picture, and expectations for how long retirement may last.
BLOG | SHOULD YOU TAKE SOCIAL SECURITY AT 62?
Some people consider using savings from a traditional IRA or 401(k) to help cover expenses while delaying Social Security. This can create a bridge to a higher future benefit—but it isn’t automatically the right move.
Withdrawals from tax-deferred accounts generally count as taxable income, so the strategy should be evaluated alongside your tax situation and long-term plan.
October is an ideal time of year to have a conversation with your investment advisor about which path is the best for your situation.
Consider how, at this point, you understand whether your retirement accounts have grown during a strong market. Now you may have more flexibility to decide how and when to draw on them—but that doesn’t automatically mean you should withdraw more or delay Social Security.
Compare the income you need now with the potential effect of claiming later, including how portfolio withdrawals may affect your taxes. The right choice depends on your goals, resources, and circumstances.
The agenda for that conversation is to look at more than the first monthly benefit:
- How much income do you need now?
- How might your benefit change if you wait?
- What would withdrawals from retirement accounts mean for your taxes?
- How would each choice affect your spouse or survivor income?
- How long might your savings need to last?
The Emotional Investing Part of the Equation
It can be tempting to claim early simply because age 62 is available. But the decision is emotional as well as financial: some people value receiving benefits sooner, while others prioritize a larger benefit later. The important step is to compare the choices using your own circumstances—not assume that one age is best for everyone.
I understand that this can make sense emotionally. Retirement feels real. Paychecks are stopping or slowing. Certainty feels comforting. An income stream today feels safer than a larger one later.
BLOG | EMOTIONAL INVESTING | THE SOCIAL SECURITY DECISION
A retirement-income plan can help show whether using savings to delay Social Security is feasible and what tradeoffs it creates. Consider reviewing the decision with a financial professional and tax adviser before making a claiming or withdrawal decision.