Should You Delay Social Security and Spend Down Your IRA?
One of the biggest retirement planning questions Americans face today is this:
Should you delay Social Security and use money from your IRA or 401(k) first?
At first glance, the answer seems simple. Many retirees feel inclined to take Social Security as early as possible because they’ve paid into the system for decades and want to start receiving benefits immediately.
But retirement income planning is rarely that straightforward.
In many situations, delaying Social Security while strategically withdrawing from retirement accounts can potentially create larger lifetime income, reduce taxes, improve survivor benefits, and provide more flexibility later in retirement.
The challenge is that every retirement situation is different.
What works for one household may not work for another. Factors like life expectancy, marital status, taxes, investment risk, healthcare costs, and legacy goals all play major roles in the decision.
Let’s break down the key considerations when evaluating whether delaying Social Security and spending down IRA assets could make sense for your retirement plan.
Why So Many Retirees Consider Taking Social Security Early
It’s understandable why many people choose to begin Social Security at age 62.
Common reasons include:
- “I want my money now.”
- “What if Social Security changes in the future?”
- “I may not live long enough to benefit from delaying.”
- “I’d rather preserve my IRA for my family.”
- “I can invest the Social Security payments myself.”
These concerns are completely reasonable. After all, retirement planning involves balancing both mathematics and emotions.
The idea of watching retirement account balances decline while delaying guaranteed income can feel uncomfortable for many retirees.
However, there’s often more happening beneath the surface financially than most people realize.
How Delaying Social Security Increases Benefits
Social Security benefits increase the longer you wait to claim them, up until age 70.
For many retirees:
- Claiming at age 62 permanently reduces monthly benefits.
- Waiting until full retirement age provides 100% of the earned benefit.
- Delaying beyond full retirement age can increase benefits by roughly 8% annually until age 70.
This means the difference between claiming early and delaying can be substantial over a long retirement.
For retirees who live into their 80s or 90s, delaying Social Security may result in significantly more lifetime income.
Life Expectancy Matters More Than Most People Think
One of the most important variables in Social Security planning is life expectancy.
If someone has serious health concerns and does not expect a long retirement, taking benefits earlier may make sense.
But for healthy retirees with longevity in their family history, delaying benefits often becomes more attractive.
Many people underestimate how long retirement can last today.
Advances in healthcare and healthier lifestyles mean more retirees are living well into their 80s and 90s. That creates a greater need for reliable lifetime income.
Social Security is one of the few income sources that is:
- Guaranteed for life
- Adjusted for inflation
- Unaffected by market volatility
That guaranteed income stream becomes increasingly valuable later in retirement.
Married Couples Face Additional Considerations
Social Security planning becomes even more important for married couples.
Many retirees focus only on their own benefits without fully considering survivor benefits.
When one spouse passes away, the surviving spouse generally keeps the higher of the two Social Security benefits.
That means delaying Social Security may not just benefit the higher earner — it may also help protect the surviving spouse financially later in life.
For example:
- A lower-earning spouse may rely heavily on survivor benefits.
- Delaying can create a larger guaranteed income source for the surviving spouse.
- Longevity differences between spouses can dramatically affect optimal filing strategies.
In many cases, married couples benefit from viewing Social Security as a long-term household income strategy rather than an individual decision.
The Psychological Challenge of Spending IRA Assets First
One of the biggest emotional hurdles retirees face is watching IRA or 401(k) balances decline.
Many people are uncomfortable withdrawing retirement savings while delaying Social Security.
But it’s important to remember:
The goal of retirement savings is to create retirement income.
Those accounts were designed to eventually be spent.
In some situations, strategically drawing from IRAs earlier can actually improve long-term retirement outcomes.
That’s especially true when taxes enter the picture.
Taxes Can Completely Change the Social Security Decision
One of the biggest overlooked factors in Social Security planning is taxation.
Taxes often become the deciding factor in whether delaying Social Security makes sense.
Many retirees don’t realize:
- Social Security benefits can become taxable.
- IRA withdrawals are generally taxable as ordinary income.
- Required Minimum Distributions (RMDs) can create large future tax bills.
- Strategic withdrawals before age 72 may reduce future taxes.
This is where retirement income planning becomes far more sophisticated than simply deciding when to file for benefits.
Understanding Required Minimum Distributions (RMDs)
Traditional IRAs and 401(k)s eventually require mandatory withdrawals.
These are called Required Minimum Distributions, or RMDs.
Once RMDs begin, retirees may be forced to withdraw more taxable income than they actually need.
That can lead to:
- Higher tax brackets
- Increased Medicare premiums
- More taxation on Social Security benefits
- Reduced tax flexibility later in retirement
By strategically withdrawing IRA funds earlier — especially in lower-income years between retirement and age 70 — retirees may potentially reduce future RMDs.
This is one reason some retirees choose to delay Social Security while spending from qualified accounts first.
Roth Conversions Can Be a Powerful Strategy
One of the most valuable tax-planning opportunities often occurs after retirement but before Social Security and RMDs begin.
During this window, retirees may have unusually low taxable income.
This creates an opportunity for Roth conversions.
A Roth conversion involves:
- Moving money from a traditional IRA to a Roth IRA
- Paying taxes now at potentially lower rates
- Allowing future growth to become tax-free
- Reducing future RMD exposure
If Social Security has already started, taxable income may be higher, reducing the amount that can be converted efficiently.
That’s why delaying Social Security may create a larger planning window for strategic Roth conversions.
Healthcare Subsidies May Also Matter Before Medicare
For retirees who retire before age 65 and are not yet eligible for Medicare, healthcare subsidies can become another important factor.
Affordable Care Act subsidies are generally based on income, not assets.
This means:
- A retiree with substantial IRA assets may still qualify for subsidies.
- Starting Social Security early could increase taxable income.
- Higher income could reduce healthcare subsidies.
In some situations, delaying Social Security may help retirees qualify for larger healthcare premium assistance before Medicare begins.
Can Investing Early Social Security Payments Beat Delaying?
Some retirees argue they can claim Social Security early and invest the payments for greater returns.
While that’s theoretically possible, there are important considerations:
- Investment returns are not guaranteed.
- Markets can decline during retirement.
- Most retirees spend Social Security rather than investing it.
- Social Security provides guaranteed lifetime income.
Comparing guaranteed income to market-based returns involves different types of risk.
For conservative retirees seeking income stability, delaying Social Security may offer peace of mind that market investments cannot always provide.
What About Leaving an Inheritance?
Many retirees hesitate to spend IRA assets because they want to leave money to children or grandchildren.
This is an understandable concern.
However, retirement planning should balance both legacy goals and retirement security.
In some cases:
- Delaying Social Security may preserve more assets later in retirement.
- Larger guaranteed income can reduce pressure on portfolios during market downturns.
- Strategic tax planning may improve long-term household wealth.
The best strategy depends heavily on overall financial goals and family priorities.
There Is No Universal “Best” Social Security Strategy
This is one of the biggest misconceptions in retirement planning.
There is no one-size-fits-all answer.
The right claiming strategy depends on:
- Health and life expectancy
- Marital status
- Tax situation
- Retirement income needs
- Investment assets
- Legacy goals
- Healthcare planning
- Risk tolerance
That’s why personalized retirement income planning is so important.
Why Comprehensive Retirement Planning Matters
Social Security decisions should never be made in isolation.
A well-designed retirement plan coordinates:
- Social Security timing
- IRA withdrawal strategies
- Tax planning
- Investment management
- Healthcare considerations
- Estate planning goals
When all these pieces work together, retirees may potentially create more sustainable income and greater long-term financial confidence.
Frequently Asked Questions About Delaying Social Security
Is it better to delay Social Security until age 70?
It depends on your personal situation. Delaying benefits can increase guaranteed lifetime income, especially for healthy retirees or married couples concerned about survivor benefits.
Should I spend my IRA before taking Social Security?
In some situations, strategically withdrawing from IRAs before claiming Social Security may reduce future taxes and improve retirement income flexibility.
What happens if I delay Social Security and die early?
If you pass away earlier than expected, delaying may result in fewer lifetime benefits received. However, survivor benefits for a spouse may still make delaying worthwhile.
How much does Social Security increase if I delay?
Benefits generally increase about 8% per year beyond full retirement age until age 70.
Can delaying Social Security reduce taxes?
Potentially, yes. Delaying may create opportunities for Roth conversions and reduce future Required Minimum Distributions.
Are Social Security benefits taxable?
Yes. Depending on your total income, up to 85% of Social Security benefits may be taxable.
Does delaying Social Security help married couples more?
Often, yes. Survivor benefits can make delaying especially valuable for married couples.
Final Thoughts
Delaying Social Security while strategically withdrawing from retirement accounts is not simply about maximizing monthly benefits.
It’s about creating a coordinated retirement income strategy.
Taxes, longevity, survivor benefits, healthcare costs, and investment risks all play important roles.
For many retirees, the decision to delay Social Security may potentially improve long-term retirement outcomes — but only when viewed within the context of a comprehensive financial plan.
If you’re approaching retirement and wondering when to claim Social Security, it may be beneficial to evaluate the numbers carefully before making a permanent decision.
A thoughtful retirement income strategy today could significantly impact your financial flexibility and confidence for decades to come.
Daniel Wendol
Item #1
00:00:01
hi everyone welcome to another dolphin Financial radio show today we’re going to be talking about one of the most popular conversations or the one I seem to be having the most with people that are looking to retire and that is should I delay my Social Security and spend down my IRA my 401k my qualified Assets in order to do so you know we do a lot of shows on Social Security I’ll put the list up here we do a lot of shows on Social Security always discussing different tactics and strategies and a lot of
00:00:37
times it makes sense to to delay and people say well if I delay Where’s My Money GNA come from how am I going to live and that’s really what we’re gonna be talking about do you does it make sense to delay Social Security and if so should you pull money from your eye right to lip now Tony Shore is in the house there he is Tony yes we’re talking about social security yet again you know we talked about this a lot lately and they are our most popular topic and today we’re going to
00:01:09
be talking about does it make sense to withdraw from your retirement Savings in order to delay filing for Social Security you know this is a big question people do I need to have a Social Security number first well we’re talking about general population here people that are legally here Tony that people that work for a living oh do you know your Social Security number by heart Dan I do and my the other day um I had to do something with the kids to get their soci I had no idea what it was and my
00:01:41
wife rattled off mine and she was able to Rattle off most of the kids numbers but your wife by memory the kids numbers too wow wow yeah I know mine and I actually know my wife’s believe it or not because we’ve used it enough but the kids no no I actually have to look at my last year’s tax returns that has them listed that’s how I find them well that’s not bad I just pull them so yeah you know part of part of my job a big part of my job is retirement income planning that’s mostly what I do and sure and
00:02:19
Social Security is big part of that and it always comes down to this really when I when I run the Social Security maximization report very popular yeah I get people calling a lot on the show and if you’re listening and watching right now and you want your own Social Security maximization report let us know just you’ll see the contact information at the end well it is huge it’s a great value because you’ll meet with them and run it for them at no charging it’s unbelievable it will find
00:02:48
that sweet spot for you it runs over what 20,000 calculations to figure out the best time to file for you and your spouse with spousal benefits and or you individually that’s awesome and rarely is it take it at 62 but that’s what people like to do so not compat combative but we get into discussions about well does that really make sense and um if so how am I going to live right where’s the money you how am I going to pay the bills if I don’t take Social Security that’s why I want the
00:03:18
money right bird in the hand is worth two in the bush right so I want to talk about that today and I have about six different factors to consider and I want to talk about what they are okay and I think generally speaking it makes sense to delay but I’ll tell you why um so the first factor is life expectancy Tony so if you live long enough will you benefit I mean it all depends on how long you’re going to live if you’re not going to live a long life say you you expect to pass away at
00:03:57
age 70 then obviously it doesn’t make sense to delay Social Security until 70 because you’ll never see a check true right so people get that right if you’re going to die early then you should take Social Security early because there’s no death benefit with Social Security doesn’t keep going to your kids or beneficiary named beneficiary so if you live an average life then it doesn’t quite matter when you take Social Security if you’re going to live to what Social Security is determined your life
00:04:35
expectancy and let’s just call it 81 or 82 if you’re going to live to age 82 and you’re currently 62 if you take it at 62 or you take it at 70 it the math comes out to be the same wow Social Security that’s what the whole point is social security is not trying to make money or you know figure out a way to get people they’re just saying hey we’re going to pay out this much the actuar say you’re going to die in this year so if you wait we’ll give you more because you’re going to get it
00:05:08
for Less years if you take it early we’re going to give you less because you’re going to get it for more years y it’s only when you deviate from the average life expectancy that it truly matters when you take Social Security it’s all about the math right I mean my grandfather is 101 he’s still alive so right so he should have delayed the 70 had he known yeah yeah I I don’t know if he did or not um he he was a farmer so I don’t know if he paid in very much you know what I mean that’s the that’s the
00:05:37
tick that’s the you know that’s the catch there for people who are farmers or in that type of occupation he didn’t work for an employer where he had a you know uh you know they weren’t taking out they weren’t putting in 6% he wasn’t putting he wasn’t getting a match for getting up early and then yeah doing some ha hay bals something right the soybeans yeah so so this one’s obviously the biggest the most important one life expectancy how long you going to live yeah right
00:06:09
right but then again it’s really only truly the biggest and most important one if you’re single because as soon as you get married now there’s another factor in here there in lies the catch and this is where you lose most people this is what most people never consider right it depends yeah it depends in the beginning of Social Security yeah it was man Works woman does not work man takes it pension at 55 takes Social Security at 62 dies at 67 is happy he took it at 62 right wife still alive not happy because she loses
00:06:56
her own benefit and you can only keep one so and she keeps what he was getting as opposed to the higher amount if the spouse delayed now with married couples a lot earning similar earnings now there’s a little bit more math but yes if you’re married you have to factor in spousal benefits yeah so if you don’t have a record and your spouse does you want half of their record that’s you know spouse will benefit you get half but you can’t get half if they’re not claimed if they
00:07:28
haven’t filed yet so if they’re delaying and you want half you’re like hey can you file so I can claim and what you used to be able to do is file and then suspend say file now my spouse can get half and now I suspend I don’t want to do that I you can’t do that anymore file and suspend they got rid of that loople yeah right so now it’s in order for your spouse to get half you have to be filed so that’s not very useful um so maybe that’s a reason to file early but then you and survivor benefits and this
00:08:01
is what I was talking about the beginning of this this section is when you pass away your spouse gets your full benefit so you kind of when you’re married you want one of your benefits to really max out not necessarily protect you but maybe protect your spouse right you don’t want to leave your loved one your uh husband or wife in a bad situation but just because oh I want to file early get as much much as I can but then after you pass they’ll be stuck with a lower amount is what you’re saying right let’s
00:08:36
use a very severe example to to illustrate this let’s say you’re 62 and you want a file and your wife is 62 and she has zero social security benefit she never worked so you are the primary bread winner and you are convinced you’re going to die at 72 everything in the math says you should take it now right but your wife’s parents are still alive at age 100 doing well and she’s got the genes that are going to suggest she’s going to live well past 100 so what do you do you know if you take it
00:09:17
now you’re locking in a low benefit for your spouse fundamentally for the rest also lock a low benefit for yourself so in if you just took your own self in a silo yeah it makes sense take it at 62 if you’re going to be dead at 70 but your spouse if it’s going to live to 100 and she’s got no other benefit then you’re going to want to delay to 70 yeah even though you’ll only see one or two checks right right so reason to delay but this isn’t addressing the issue is well how do what happens next you know
00:09:47
do I take how do I live do I take my Social Security um late and then take from an IRA like that’s really the question we’re going to answer but we have to address those first two to really get an understand like it’s not all about the money sometimes for yourself you have to factor in your spouse so let’s talk about one that is probably the most popular reason people take it early is because hey I’ll take it early because it’s my money I get to do something with it there’s no death
00:10:19
benefit hey Social Security can go bankrupt at least I got some money or I’d rather have it now because I can invest it I don’t even need it I’ll take that money invest it and do better than the government and so that’s opportunity cost because if you don’t take it at 62 and you wait till 70 say that’s eight years of no income that you would have gotten could use that to to pay off debts to reinvest so the question is what could you do with that money what kind of investment returns could you get
00:10:49
on that right but you’re still getting a return you might be getting a better investment return by leaving it and get more return on your money by leaving it because it does roll up every year that’s right you do get the increase so you the longer you delay the more money you get right and that’s very important because you do get a Guaranteed Rate of increase you know what it’s going to be because social security has you know the actuaries have planned it out if you’re going to live
00:11:20
those the set you know average lifespan then then it doesn’t matter again we the same thing but but someone would say okay if I lived to 82 and I took early I got eight years worth of income that I reinvested and I did well and yes so that is true but you also are getting less now and the increase between say 67 and 70 is 8% a year we know that yeah so but you’re right there’s the opportunity cost so I could see where people get hung up on this yeah and it simply comes down to I mean first of all what kind of
00:12:00
investment return are you going to get right you know what you’re going to get with Social Security because it’s guaranteed if you put it in the market to try to outdo what you would have gotten and to try to grow it you could do really well or when you need finally need the money it could be 2022 and the Market’s down 20% or 10% exactly so then you lost money then you actually lost money so if you need if if you if if you’re going to take from your IRA and to in order to delay Social
00:12:34
Security the reason you’d be taking from your IRA a 41k is because you obviously need that money to live so you’re not investing that you’re that’s true spending it right so that’s the first argument against delay um against taking it early is you’re actually spending it anyway but at the same token can say someone would say well what if I left it there it would still grow take spend Social Security because that’s not going to grow and that other investment in my IRA is going to grow over eight years so
00:13:07
I see that right but again we’re talking about income versus investment we’re talking about guarantee versus you know unknown because most people who take it early are they really going to take it early and then make sure they put all that money into the market or into an investment and let it grow or are they going to spend it use it to they’re going to get that money each month and spend it more than likely right right but the you can make the argument okay instead of leaving it instead of
00:13:33
spending it and taking it from my IRA I’ll take it from the Social Security spend that money and then leave the money I was going to spend in my IRA to grow yeah but then it’s just like well the money in Social Security was going to grow but I don’t get that right away I get that over the lifetime it’s delayed gratification so then it goes back to are you married does that benefit both your lifetimes um and then what are you going to do are you going to invest it safely because right now you can get 4% maybe
00:14:02
right and then we’re talking June or I mean uh what are we in August September of 2022 geez I don’t even know what year it is now we’ve been doing the show so long but yeah can you get us a guaranteed you know 4% that’s a lot better than last year when getting a guaranteed 2% was good So eventually maybe 8% isn’t so great the RO right so back in the 80s when interest rates you know mortgage rates were 12% maybe it was hey take it now because you can actually buy a CD and get a better return right so this is
00:14:36
there’s no set answer here yeah but opportunity cost is a big one and I would argue well you got a guarantee versus uh risk yeah okay so you do I mean the great thing is is the report that you run and the the benefit of working with a financial services professional an adviser like yourself is that you actually think through all these scenarios based on their individual situation or a couple situation if they’re a couple and then help them make that decision by doing the math and because this this gets too
00:15:09
complicated for people to keep track of all these threads and actually remember to take all of this into account and that’s why you don’t want to go it on your own I I’m just saying I think that’s a good point we need to make here whether they work with you or another trusted professional who’s going to help them with this although most Financial professionals won’t help help you with all these different strategies regarding Social Security because they don’t make money off of that so they don’t uh but
00:15:37
you help your clients with this because uh you want to help them that you see the big picture I mean I I think you should change your name Dan from Dolphin Financial to Dan Wendell’s holistic Financial agency that’s what you should change Dan Wendell’s holistic Financial agency it’s catchy wow it rolls off the tongue no but you’re right most advisors um and I don’t say most a lot of time the conventional wisdom is take it early yeah but again that prevents their client from spending down their assets
00:16:13
which is what we’re charging a fee on so factor that in ah okay I see the I see the thinking there too when I tell people to delay and spend their Ira money that’s actually reducing my fee right but in some cases you have done that in some cases you say it is it is delay but again it’s it’s people get really adamant about these decisions and when I say hey we’re going to delay and pull from Ira people don’t like seeing their account balance go down because you don’t see Social Security it’s
00:16:45
nebulous right yeah um the here’s another Point Legacy people don’t like well if I if I spend down my IRA what are my kids going to get right what are my grandkids going to get whereas if I spend soci they’re not going to get it anyway so I’d rather spend Social Security than my IRA it’s a good point that’s a good argument it’s a good point but when you start doing some math again going back to the first what’s your life expectancy are you married if you start doing some math
00:17:15
you’ll see later in life if you live to the ages where most people are living now in their 80s even into the 90s you’ll start to see that delaying actually makes more sense you end up with a larger nest egg later because of some other factors such as sure pulling and letting things grow and not needing as much because you have a larger portion coming from Social Security with the cost of living right so the idea but if you just take so far if you just stop there and say well I can invest it elsewhere I can leave it
00:17:49
to my kids then yeah it really is attractive to take Social Security early and not delay but when we start factoring in these next few there’s two more I want to talk about all of a sudden you’re like wait now I really have so this is why you’re right holistic here’s one that this is relatively new and I say relatively say within the past 12 years when we started getting subsidies for he health insurance from the government um this is for people under age 65 not on Medicare they get a health insurance
00:18:20
subsidy based on their income not on their assets okay so you can have trillions in the IRA and still get a subsidy because you don’t have any income so when you take Social Security early you’re taking income you can’t control it you know you’re getting it and you’re increasing the income you have thereby reducing your subsidy so by delaying Social Security you can then use other sources to get income doesn’t show as income you get a higher subsidy to pay for health insurance this could be huge because the
00:18:56
health insurance subsidies can be tens of thousands of dollars a year depending on the situation and as you get closer to 65 health insurance gets more expensive so health insurance subsidy planning is a factor when it comes to when to claim Social Security believe it or not um but that’s a it’s for a small majority of people right because that’s only before you turn 65 so yeah right and I should say a small minority of people not too many people are in that but we’re talking people typically at60
00:19:29
2 to 65 the only ones that can claim Social Security and not be on Medicare right right but here’s the big one Tony this is by far and away the biggest factor is taxes I knew this was coming how did I know taxes played a role in this and it’s it’s amazing how big taxes factor into Social Security planning it’s and so when you’re having a discussion about when to take Social Security it’s not just about life expectancy and income it’s about taxes and in many ways first of all you have
00:20:04
taxes on the social security so it’s important to note that when you’re determining how much of your social security benefit is taxable um there’s there’s these limits right it’s you know is it 24,000 32,000 44,000 right depends on you married or not but these are the conversations I have with people and it’s like well um that’s not a lot but it’s whe How much of your social benefit is taxable is based on your provisional income provisional income well what the what is that that’s a new term well it
00:20:37
is because you never really deal with it provisional income is your income and Social Security only half of your social security benefit counts toward provisional income so if you make 40,000 in social security benefit your provisional income is only 20,000 so that’s how they determine how much of it is taxable so you’re like oh so in other words the more you have in Social Security tax uh income the less you’re going to get taxed the less of it’s going to get taxed soon as you add
00:21:07
a pension or if you have other income then yeah but it’s important that people realize that so by delaying Social Security early on you can you you’re not going to pay any tax on it later on when you get a larger benefit only half of it counts as income for taxation purposes on Social Security that’s important concept it’s confusing but important not yeah and we’ve done a whole we’ve done shows talking about how Social Security is taxable people don’t realize that put
00:21:36
that up there you do a lot of those shows on that yeah exactly and up to up to 80% 85 85 which brings right so I’d rather have a dollar of social security income than a dollar of regular income whether you pull it from an IRA or it’s just revenue from an employer I’d rather tax less than regular income exactly even if you make the max income only 85% of your benefits are taxed saving 15 cents on a dollar right so which which would so which leads me to say delay because you get a higher portion of your income from
00:22:16
Social Security later and only 85% of that’s going to be taxable at the most maybe none of it will be taxed yeah um so that’s that’s the tax portion on income taxes and Social Security tax then we have rmds required minimum distribution start at age 72 that is they look at all of your IRAs 401ks any qualified money and say you never pay tax on it I know you’ve been delaying it but we want you to start taking it and here’s how we do it based on your age formula this is what you have to take okay okay what
00:22:50
does this have to do with Social Security delaying Social Security well the whole point of the show is if you delay Social Security you need to live you pull money from your IRA you’re thereby reducing your IRA I don’t want to reduce my IRA you know I would like money well you’re paying the taxes now and then when you hit 72 and they calculate your rmd you have less in your IRA well I’d rather I don’t mind paying taxes because that means I have more in my Ira yeah but you have more income
00:23:19
coming from Social Security so you have less in your IRA you’re forced to pull less out thereby reducing your tax liability later there you go when taxes might be higher yeah which brings it to the next point which is Roth conversions are huge because you’re taking money out of an IRA paying the taxes now and then you don’t have to pay taxes again you don’t have to take rmds from the Roth right so so the idea is don’t take Social Security right away take as much as you can from the
00:24:06
IRA well I don’t need all of it take it anyway up to the next tax bracket convert it and now it’s sitting in a tax free account so you could take that be strategic about it but if you’re claiming Social Security at 62 or or early now all of a sudden you have 30,000 40,000 of income from Social Security and you’re like oh I can’t convert because I got this income and you’re raising your taxes on Social Security you can convert less because you’re already at the higher tax
00:24:43
brag reason alone rmd con and Roth conversions it’s bottom line Tony there’s a lot of tax reasons on it plus your future tax liability is going to be less because you don’t have to take RDS your Roth will be higher and that’s tax-free and you could be in more control when is the time to really consider Roth conversions when your tax brackets to the lowest tax brackets are pretty low right now the other time to consider is when your income is low when people retire so the retire at
00:25:19
62 instead of taking from the um Social Security why not pull from the IRA and convert and spend and then delay right then take social later makes sense so to conclude because there’s a lot of factors in there we talked about them but taxes are the biggest and I don’t like the tax tail wagging the dog but I do think that a social security delay is a tax discussion you should be factoring in everything regarding retirement income is a tax discussion yes yes especially everything because the IRS is involved
00:25:59
in your IRA and your R&D all your all your all your Investments all your savings and especially your retirement accounts 401ks 403bs IRAs Roth hirers they all have tax implications good and bad so it’s like every episode we have to mention taxes pretty much because they play a role yeah and you know when I do these Social Security maximization reports and it says you delay to 70 and you take it at 62 people see the numbers right so it’s like and and they’re all projections right but we see the numbers and say oh
00:26:38
look at that um yeah we’ll get $150,000 more over the lifetime if we do this strategy versus the one we’re thinking and it’s usually delay because we were thinking about taking it early and on paper it makes sense but then people say well yeah but right and so that yeah but it’s a really good conversation and a lot of times we say yeah it does make sense on paper but we’re not going to delay for these reasons maybe we want to do more spending up front but then it’s like wait what about a conversion what
00:27:13
about you know spending more in the beginning but and and then by doing spending in the beginning from an IRA oh my gosh the IRA goes down really quick but then it levels off if you spend early early early and you keep going going going because you have to then your account will go to zero but if you spend early and then level off that’s the whole point so yeah it’s a lot it’s difficult to express in a podcast format it’s a lot easier in person when you’re looking at your specifics and showing the chart and say
00:27:48
yeah yeah when you’re sitting across from table from them showing them here it is or up up on a on a screen here’s the chart and then go through it together and look at the the numbers together and talk about life expectancies and strategies it it it makes a world of difference and you know the whole Co thing you’re able to interact with people virtually but it it does make a difference when you can talk to them one on-one especially in person but uh even virtually uh one-on-one it’s
00:28:18
hard to do in a podcast though because it’s so much personalized information that you need right yeah and I’ll leave you it it does because but once you put in their personal information it’s relevant it’s not just hypothetical of well the average person so on no this is your Social Security record this shows you your benefits your your spouse’s situation and I leave you with it’s kind of like an analogy right now we’re facing a crisis in the country with debt right and we all know that foregoing
00:28:49
stuff now would benefit us in the future but it’s so appealing to spend now right it’s the same thing we’ve got that ingrained it’s human nature to want it now I want it now yeah right so all the math and all the charts will show you hey maybe it makes sense for you the delay but again you got to get past that hump but don’t you throw taxes in there that’s when it goes you get pushed over the top you’re like oh I can delay and I can benefit me instead of the IRS maybe
00:29:22
let’s talk let’s talk right so again though it’s a very complex issue um it’s I I mean we could probably talk for hours on this at least I could um not today right right I could probably go on but yeah that’s it Tony I want to say and um again people if you’re thinking about social security and you’re like ah this guy talking about delaying because that’s the new thing now more and more people I remember when I started talking about delay no one did it was always take it
00:29:54
early now more and more people are wising up to it more fiduciaries out there they saying yeah I need to know this and so they’re delaying it so if you’re getting if you’re thinking you’re like you know I just need to see it on paper give us a call let us know I’ll put the phone number up in a minute Tony thanks for a good show God bless Social Security God bless Social Security discuss in today’s show for informational purposes only this show is not investment advice Dan W noral and
00:30:22
Financial Group are affiliated or endorsed by any government agency investment advisory services are offered through Dolphin Wealth Management Inc a registered investment adviser in the State of Florida Insurance products and services are offered through Dolphin Insurance Inc dolphin Wealth Management Inc and dolphin Insurance Inc are affiliated companies doing businesses as dolphin Financial Group you should talk to someone at Dolphin finan group before implementing any of these strategies or ideas