65-Year-Old Retiree Taps $400,000 to Delay Social Security, Lifting Annual Benefit to $44,640
Updated
Updated · 24/7 Wall St. · Jun 2
65-Year-Old Retiree Taps $400,000 to Delay Social Security, Lifting Annual Benefit to $44,640
3 articles · Updated · 24/7 Wall St. · Jun 2
Summary
$400,000 in planned withdrawals from age 65 to 70 would let the single retiree fund $80,000 annual spending while delaying Social Security to lock in a larger check.
Her annual benefit would rise from $36,000 at full retirement age 67 to $44,640 at 70, adding $172,800 through age 90 before cost-of-living increases compound on the higher base.
About $40,000 a year from the 401(k) would leave roughly $23,450 taxable after the standard deduction, keeping her in the 12% bracket with about $2,700 in annual federal tax; brokerage gains could largely stay in the 0% capital-gains band.
Using roughly $200,000 of the 401(k) before 70 would cut her first required minimum distribution at 73 by about $7,800 and reduce the risk that later withdrawals trigger Social Security taxation and Medicare IRMAA surcharges.
The strategy also leaves room for small Roth conversions before 70, with the key deadline to claim benefits in the month she turns 70 because delayed-retirement credits stop then.