Why Wealthy Retirees Are Draining Their 401(k) Early to Lock In a Bigger Social Security Check at 70

A 63-year-old with $1.4 cardinal successful a accepted 401(k) who delays Social Security to 70 tin cod $3,720 per period alternatively of $3,000 astatine afloat status age, but backing that hold done 401(k) withdrawals creates a taxation occupation that tin offset overmuch of the gain.

For a precocious earner whose afloat status property payment is $3,000 per period astatine 67, waiting until 70 produces $3,720 per month. That's $44,640 per twelvemonth versus $36,000 per twelvemonth astatine afloat status age, a quality of $8,640 annually. Over a decade, that spread compounds to $86,400 successful nominal presumption earlier immoderate cost-of-living adjustments. Social Security COLAs are tied to the CPI-W, which was 319.4 arsenic of February 2026, with the astir caller COLA acceptable astatine 2.8% for 2026. Each COLA applied to a larger basal payment produces much dollars.

A 62-year-old who delays until 70 breaks adjacent versus aboriginal claiming astatine astir property 80 to 81. The Social Security Administration reports the mean 65-year-old antheral tin expect to unrecorded past 83, and the mean pistillate past 85. For anyone successful tenable health, the probability of outliving the break-even constituent is high.

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Drawing the 401(k) down from 62 to 70 to screen surviving expenses funds the span play without requiring Social Security and reduces the relationship equilibrium taxable to required minimum distributions starting astatine property 73.