Should you draw down your 401(k) to delay Social Security? The answer is simple — but only if you know this number

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Should you draw down your 401(k) to delay Social Security? The answer is simple — but only if you know this number Vishesh Raisinghani Thu, September 10, 2026 at 6:45 AM EDT 5 min read JPM Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. It's a critical decision and you only have one shot at it. Sometime in your 60s you'll probably have to choose between claiming your Social Security benefit or delaying it by drawing down your 401(k) instead. Thousands, if not tens of thousands of dollars are at stake and most financial experts can give you multiple different variables, from market returns to life expectancy, that can complicate the decision further. Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one JPMorgan sees gold hitting $5,000/oz by Q4 — and savvy investors are protecting their wealth with a tax-advantaged Gold IRA. Get your free guide from Priority Gold The tax breaks in Trump's 'big beautiful bill' expire after 2028. Here are 4 moves to make before the window closes It's easy to get analysis paralysis with all the online calculators on breakeven ages, tax considerations and expectations of market returns. But the decision can be simpler if you focus on one number: 8%. Here's why this number could be the crucial breakthrough you're looking for. Beyond full retirement age, which is 67 for anyone born after 1960, your benefits increase at an annual pace of 8%, according to the Social Security Administration (1). It's important to note that these credits are calculated on a monthly basis, so your benefit will be slightly larger even if you delay your claim by a single month beyond this age. It's also important to remember that this is a guaranteed gain. The assets in your 401(k) may or may not be able to keep up with this fixed return. For instance, the S&P 500 has delivered an average return of 10% historically, per Fidelity (2), but there's simply no way to predict if this is the return you'll enjoy between the ages of 67 and 70. For that reason alone, the delayed retirement credits could be worth drawing down your 401(k) assets. In fact, delaying benefits until the age of 70 is beneficial for 90% of U.S. workers, according to a 2022 paper by David Altig, chief economic advisor at the Federal Reserve Bank of Atlanta (3). The math simply favors taking the delayed credits. Nevertheless, millions of Americans end up taking their benefits early, either because of financial necessity or lack of awareness. Waiting three extra years without a monthly benefit check is easier said than done for many people. If you're struggling to bridge the gap, here's how you can make it easier. If you're anxious about covering living expenses between retirement and a delayed Social Security claim, there are a few ways to bridge the gap. A robust medium-term fund held in hard assets, such as gold, could serve as that bridge. Gold is traditionally considered a safe haven, which makes it ideal for parking excess cash that you can deploy during this transition period of early retirement. Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA. With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver . If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today . Working with a professional financial advisor could also be the savvy money move to plan this phase of your retirement. A platform like Empower can help reduce the stress of filing taxes by connecting you with a licensed tax professional who can support you from start to finish. Unlike standalone tax software, Empower lets you manage your multiple retirement accounts in one dashboard and lets you file from the same platform. Even if you're not an Empower client, you can still file taxes through Empower by creating a free Empower Dashboard to get started . If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning. Simply answer a few questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs. You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals. WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed. A single line on your car insurance policy could be inflating your premium by up to 30% — here's what to change Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake. Here's what it is and 3 simple steps to fix it ASAP Your Social Security 'Trump Bump' in 2027 will be one of the biggest in 25 years — but there's a serious catch no one's talking about Dave Ramsey says this 1 indulgent purchase stops Americans from becoming wealthy. Here's what he recommends instead We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines . Social Security Administration ( 1 ); Fidelity ( 2 ); National Bureau of Economic Research ( 3 ) This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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The U.S. Social Security retirement benefit offers a guaranteed 8% annual increase in payouts for each year that claiming is delayed past full retirement age of 67. This serves as a stable retirement asset securing method compared to the uncertain market returns of 401(k)s. Investors can maximize long-term retirement income by adjusting their benefit claiming timing.

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