Delay Social Security, Spend IRA — $259,200 More for Retirees
By John Nada·Jul 19, 2026·5 min read
Delaying Social Security to 70 can add $259,200 to retirees' income. Key: spend IRA first, maximize benefits later.
Retirees sitting on a $500,000 traditional IRA can boost their lifetime income by a hefty $259,200 if they delay Social Security claims until age 70, Yahoo Finance reports.
The choice between starting Social Security at 62 or waiting until 70 could mean a stark contrast in benefits. Claiming early slashes the potential monthly check by up to 30%, significantly impacting retirees' financial landscape. Those who delay benefits until 70 see their base benefits grow to about $2,480 monthly, compared to just $1,400 if they start at 62 on a $2,000 full retirement age base.
Why such a dramatic difference? It's all about leveraging the system's design. The longer wait not only amplifies monthly checks but also compounds through annual cost-of-living adjustments, which for 2026, stood at 2.8%. These adjustments ensure that the purchasing power of Social Security income remains relatively stable over time, offering retirees a more substantial financial cushion in their later years.
Spending down the IRA first isn't just about filling the gap. It's a tax-smart strategy that shrinks future required minimum distributions, set to kick in at 73. This approach helps retirees maintain their income in lower tax brackets during those early years, optimizing long-term financial health.
Yet, the decision isn't purely about numbers. It's about understanding the delicate dance between pensions and portfolios. A well-planned drawdown sequence can ensure retirees' money lasts longer, reducing the risk of outliving savings. The role of a financial advisor can be crucial here, as they can tailor a plan to individual circumstances, factoring in life expectancy, health status, and personal financial goals.
The Social Security benefit formula is influenced by two critical variables: a wage-indexed average of the 35 highest-earning years and the age at which the retiree claims. The strategic delay leverages the system's design, allowing benefits to grow approximately 8% per year beyond full retirement age until age 70. For someone whose full retirement age is 67, this translates into an increase of about 24% by age 70, a significant incentive for those who can afford to wait.
Each year the cost-of-living adjustment applies to the larger benefit amount, compounding the advantage over time. For example, a worker with a full retirement age benefit of $2,000 per month would receive approximately $1,400 per month if they claimed at 62. Waiting until 70 raises this same underlying benefit to roughly $2,480, creating a substantial monthly gap of about $1,080 before any COLA is applied.
The decision to spend the IRA first is a strategic move. By drawing down the IRA prior to starting Social Security, retirees can effectively fill empty low tax brackets. This not only provides necessary income but also reduces future required minimum distributions. These distributions, which begin at age 73, can be substantial, potentially pushing retirees into higher tax brackets if not managed carefully. By strategically reducing the balance in the IRA, retirees can maintain a more favorable tax situation, allowing their Social Security benefits to be taxed at a lower rate.
Retirees who reach their early 60s with roughly $500,000 in a traditional IRA and anticipate Social Security benefits must navigate a crucial sequencing decision. This choice quietly determines whether their portfolio will endure throughout their retirement years. The debate is whether to leave the IRA untouched and start Social Security at 62, or to draw from the IRA first, allowing Social Security benefits to accrue until age 70. The financial implications of these choices are profound, with the dollar difference over a typical retirement running well into six figures.
The intricacies of Social Security claiming strategies reveal a complex interplay between immediate financial needs and long-term wealth preservation. Retirees must weigh their current financial status against the potential for increased benefits in the future. This situation often necessitates a deep understanding of personal financial goals and risk tolerance, which can be clarified through consultations with a financial advisor. These professionals can provide personalized advice, helping retirees make informed decisions that align with their unique circumstances.
The importance of understanding the impact of claiming age on Social Security benefits cannot be overstated. The reduction of up to 30% for early claims is permanent, locking retirees into a lower benefit for life. Conversely, deferring benefits allows retirees to capitalize on the system's design, which rewards patience with higher monthly checks. This strategy not only enhances immediate income but also offers long-term financial security, as higher benefits continue to compound through COLA increases.
The financial landscape for retirees is complex, requiring careful consideration of various factors. The decision to delay Social Security and draw down an IRA first is not a one-size-fits-all solution. It requires a nuanced understanding of individual circumstances, including health status, life expectancy, and other income sources. By carefully evaluating these factors, retirees can create a strategic plan that maximizes their lifetime income and reduces the risk of outliving their savings.
As retirees face these critical choices, the question remains: How many will take the path less traveled and defer their immediate Social Security gratification for a more secure future? The decision is not merely about numbers; it involves understanding the intricate balance between current financial needs and long-term wealth preservation. For many, this path may lead to a more comfortable and financially secure retirement, underscoring the importance of strategic planning and informed decision-making.