Should I use my 401K as a bridge to delay Social Security until age 70?
Trying to decide the smartest path forward with my retirement finances. I'll hit my full retirement age (FRA) in September 2025, but I'm seriously considering delaying my Social Security benefits until I turn 70. The numbers show my monthly benefit would increase by about $1,350 if I wait those extra years. I have approximately $775,000 in my 401K that I could tap into as a bridge until 70. My thinking is that this approach would serve two purposes: 1) I'd get the higher SS benefit for life, and 2) drawing down my 401K now would reduce my required minimum distributions (RMDs) later, potentially keeping me in a lower tax bracket long-term. Once I hit 70, my Social Security would basically cover all my living expenses (house is paid off, no car payment, etc.), so I wouldn't need to withdraw much from retirement accounts. Does this strategy make financial sense? Any pitfalls I'm overlooking? Thanks for any insights!
20 comments
Join the conversation
Gabriel Graham
This is actually a very sound financial strategy that many financial planners recommend. By delaying your Social Security until 70, you're essentially buying the best annuity on the market - guaranteed 8% annual increases from FRA to 70, plus cost of living adjustments. The math generally works in your favor if you live past your early 80s. Using your 401K as a bridge is smart for exactly the reasons you mentioned - it reduces future RMDs and can help manage your tax brackets in retirement. Just make sure you're being strategic about which accounts you withdraw from (traditional vs Roth if you have both). One thing to consider: make sure you're accounting for healthcare coverage during this period if you're retiring before Medicare eligibility at 65.
0 coins
Alicia Stern
•Thanks! I'm already on Medicare (turned 65 last year), so healthcare is covered. One thing I'm still confused about - should I be converting some of my traditional 401K to Roth during these bridge years since my income will be lower? Or just take the straight withdrawals from the traditional 401K?
0 coins
Drake
I did exactly what you're planning. Retired at 66 (my FRA), used my 401k to bridge until 70, and now my SS check is $3,880/month instead of the $2,900 it would've been. Best financial decision I ever made. My RMDs are more manageable too, which helps with Medicare IRMAA surcharges. One suggestion - set up automatic monthly distributions from your 401k that roughly match what your SS would have been, helps with budgeting and makes the transition at 70 seamless.
0 coins
Sarah Jones
•but doesnt this strategy only work if you live a long time? im worried about delaying and then not living long enuf to break even. how do you calculate the break even point??
0 coins
Sebastian Scott
Sounds like a decent plan to me. Just make sure you're not leaving your spouse high and dry if something happens to you during those delay years. My buddy Jim did this and then passed away at 69, really messed up his wife's financial situation.
0 coins
Emily Sanjay
•This is such an important point that gets overlooked! The surviving spouse would only get the larger of the two benefits. So if the higher-earning spouse dies before claiming, the survivor might miss out on thousands. OP, if you're married, you should absolutely model both scenarios - what happens if you live a long time AND what happens if you die during the delay period. For some couples, it makes more sense for the higher earner to claim at FRA to lock in survivor benefits, while for others, delaying is still optimal even accounting for this risk.
0 coins
Jordan Walker
Why complicate things? Just take SS when you hit FRA and leave your 401k alone to keep growing. Thats what I did and Im doing FINE. All this fancy planning just gives you a headache lol
0 coins
Gabriel Graham
•While simplicity has its merits, the financial difference can be substantial. By delaying SS from FRA to age 70, you get approximately 8% more benefit per year, which is guaranteed, inflation-adjusted income for life. Most 401k investments won't consistently deliver that kind of guaranteed return with zero risk. For someone with a $2,500 monthly benefit at FRA, waiting until 70 could mean an additional $800+ per month for life. Over a 20-year retirement, that's nearly $200,000 in additional benefits.
0 coins
Natalie Adams
THE SSA DOESN'T WANT YOU TO KNOW THIS!!! The whole "delay until 70" thing is actually just a way for them to avoid paying benefits to people who die between FRA and 70!!!! They KNOW a certain percentage of people will DIE before collecting A SINGLE DOLLAR if they delay!!! Think about it - why else would they offer such a "good deal"?? It's because they're BETTING ON YOUR DEATH!!!!!
0 coins
Drake
•That's not how Social Security works. The delayed retirement credits are actuarially neutral - meaning they're designed so that, on average, people receive the same total benefits regardless of when they claim. Some people who delay will die early and receive less, while others will live longer and receive more. SSA isn't "betting" on anything; they're providing options to manage longevity risk. The 8% per year increase was calculated by actuaries to be fair based on life expectancy tables. It's actually a very valuable option for those worried about outliving their savings.
0 coins
Sarah Jones
have u talked to a financhal advisor? my sister did something like this but her advisor told her to do roth conversions during the bridge years cuz her tax bracket was lower. might be worth paying someone for advice before u make big decishun
0 coins
Alicia Stern
•I've talked to a few people, but haven't hired a professional yet. The Roth conversion idea keeps coming up, so I should probably look into that more. Thanks for the suggestion!
0 coins
Elijah O'Reilly
I tried calling SSA to talk through my options like this and was on hold for TWO HOURS before I got disconnected. Then called back and waited another hour! Has anyone found a better way to actually reach a real person at Social Security? I need to discuss some specifics about my delayed retirement credits.
0 coins
Gabriel Graham
•I had the same problem but found a service called Claimyr that got me through to an SSA agent in under 10 minutes. It basically navigates the phone system for you and calls you when an agent is on the line. Saved me hours of frustration. Their site is claimyr.com and they have a video showing how it works: https://youtu.be/Z-BRbJw3puU I used it when I needed to sort out my delayed retirement credits calculation. Much easier than repeatedly calling and waiting on hold.
0 coins
Emily Sanjay
One aspect of this strategy I haven't seen mentioned yet is the impact on your tax situation during the bridge years. When you're taking 401k distributions as your primary income source, you'll have more control over your taxable income than you would with SS benefits (which are partially taxable based on provisional income tests). This creates a unique opportunity to do Roth conversions during these years, potentially converting significant portions of your traditional 401k to Roth while staying in lower tax brackets. This could substantially reduce your RMDs later AND provide tax-free withdrawal options in the future. The combination of delayed SS + strategic Roth conversions during bridge years + reduced RMDs later can create a very tax-efficient retirement income strategy.
0 coins
Alicia Stern
•That's really helpful! Do you know what tax bracket I should try to stay under when doing these Roth conversions? Is there a sweet spot?
0 coins
Sebastian Scott
My neighbor tried this exact strategy then the market crashed in his first bridge year and he panicked and took SS early anyway. Just something to consider - can you stomach a major market downturn while you're actively withdrawing from your 401k?
0 coins
Gabriel Graham
•This is why a proper retirement income strategy should include a cash buffer for market downturns. Ideally, you'd have 1-2 years of expenses in cash or very conservative investments so you can avoid selling equities during market drops. A good approach might be to segment the 401k into buckets: a conservative bucket for the first 1-2 years of bridge income, a moderately conservative bucket for years 3-4, and leaving the remainder invested for long-term growth.
0 coins
Drake
One more important point: run calculations on the tax implications of higher RMDs vs. higher SS benefits. While reducing RMDs is generally helpful, remember that 85% of SS benefits may become taxable if your other income (including RMDs) is high enough. In some cases, the tax advantage of reducing RMDs can be partially offset by increased taxation of your larger SS benefit. This doesn't usually negate the advantage of delaying, but it's something to model in your specific situation. A good tax-focused financial planner can run these projections for you and might identify some additional strategies to minimize lifetime tax burden.
0 coins
Alicia Stern
•Thanks for raising this point. I hadn't considered how the higher SS benefit might affect the tax calculation long-term. Sounds like I really should get some professional advice to model all these variables. Appreciate everyone's insights!
0 coins