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Retirement Planning

Social Security Timing Is Everything

How Your Benefit Start Date Influences Your Entire Financial Plan

by Doug Warren

• 3 Mins

Social Security, the bedrock of American retirement planning, can often feel like an intricate dance, full of twists, turns, and decisions. When to claim? How much to expect? And how does this financial ballet impact the overall choreography of one's retirement portfolio? Each choice carries its own set of implications.

Crunching the Numbers: The Impact of Timing on Benefits

Before we delve deeper, let's ground ourselves in some hard figures from 2023. *

These figures illustrate the maximum benefits, so they won't apply to all. The main point is that, regardless of one's specific benefit, there is a sizable difference between early claims and delayed ones. But despite the clear financial distinction, delaying isn't always optimal. Your decision on when to start your benefit must also factor in the implications for your lifestyle as well as your other retirement assets.

Balancing Social Security and Retirement Savings

For most, retirement income revolves around two central pillars: Social Security benefits and withdrawals from retirement accounts like 401(k)s or IRAs.

Start claiming Social Security earlier, and although your monthly benefit will be smaller, you might reduce the immediate need to withdraw large sums from your IRA. This approach could potentially preserve more of your retirement savings, allowing for greater growth potential.

On the other hand, if you delay claiming Social Security in pursuit of a larger monthly benefit, you might find yourself dipping into your retirement savings sooner. This means drawing down your IRA faster, potentially missing out on additional compounding.

The Ultimate Retirement Question

What's more beneficial? Initially maintaining a sizable IRA balance but receiving a smaller monthly Social Security check? Or, maximizing your Social Security payout but potentially eating into your retirement savings earlier?

There's no universally right answer. Retirement strategies are as unique as fingerprints, each tailored to an individual's circumstances, goals, and risk tolerance. However, thoughtful consideration of the following advantages and disadvantages can help guide your decision:

Starting Social Security Early



Delaying Social Security



By weighing these advantages and disadvantages against your personal circumstances and projections, you can make a more informed decision about the best time to claim your Social Security benefits.

Collaborating with a knowledgeable financial advisor can further clarify this decision, ensuring you're making the best choices for your unique retirement journey.


*Source: Social Security: Frequently Asked Questions “What is the maximum Social Security retirement benefit payable?”