Should I Delay Social Security? How to Decide Based on Income, Assets, and Taxes

You’ve probably heard: “Wait until 70 to take Social Security — it’s a guaranteed 8% return.”

But that guidance does not fit everyone — particularly those retiring early with $500,000 or more in investable assets.

Instead of relying solely on rules of thumb, it can be helpful to make the decision based on a coordinated income and tax strategy.

The Upside of Delaying

Delaying Social Security from age 62 to 70 can increase your benefit by up to 77%, depending on your earnings record. This potential increase may be especially valuable for higher earners and married couples, where spousal and survivor benefits are part of the equation.

But Delaying Creates an Income Gap

If you retire at 62 but delay Social Security until age 67 or 70, you’ll likely need to draw from other assets to fill that income gap.

While that might seem like a drawback, it may actually create planning opportunities — particularly from a tax perspective.

The Roth Conversion Window

During these "gap years," your taxable income may be lower than it will be later in retirement — offering a window where Roth conversions can be done more tax-efficiently. This approach can potentially reduce your required minimum distributions (RMDs) and improve your tax diversification.

Example:
If you retire at 63 and delay Social Security to 67, that may give you four years to convert IRA funds to a Roth IRA while staying in a lower tax bracket. This timing could help you avoid triggering higher Medicare premiums through IRMAA or increasing the taxable portion of your future Social Security benefits.

Coordinating with IRMAA and Medicare

Social Security benefits can begin as early as age 62, while Medicare starts at 65. Taking benefits before Medicare can simplify some aspects of income planning. However, in certain cases, delaying Social Security and using those years to manage taxable income may reduce IRMAA-related surcharges and lower overall taxes.

Final Thought

The decision to delay Social Security is not just about how long you might live — it’s about whether your overall income strategy aligns with your goals, assets, and tax situation. Delaying may be beneficial for some, but it depends on a variety of factors that should be reviewed carefully.

Want help modeling your options and building a strategy that accounts for timing, taxes, and Medicare?

Schedule a Complimentary Social Security & Retirement Income Strategy Session

Securities offered through LPL Financial, member FINRA/SIPC. Investment Advice offered through Convergence Financial, a registered investment advisor. Convergence Financial and Telos Strategic Wealth are separate entities from LPL Financial.

Sources and References

1. Social Security Administration – Delayed Retirement Credits
   www.ssa.gov/benefits/retirement/planner/delayret.html
2. Social Security Administration – Retirement Planner: Full Retirement Age
   www.ssa.gov/benefits/retirement/planner/ageincrease.html
3. Social Security Administration – How Work and Earnings Affect Benefits
   www.ssa.gov/benefits/retirement/planner/whileworking.html
4. Medicare.gov – IRMAA: Income-Related Monthly Adjustment Amount
   www.medicare.gov/your-medicare-costs/part-b-costs
5. IRS – Roth IRA Conversions and Tax Considerations
   www.irs.gov/retirement-plans/roth-iras

Centers for Medicare & Medicaid Services (CMS) – 2025 IRMAA Thresholds and Premiums

www.cms.gov/newsroom/fact-sheets/2025-medicare-parts-b-d-premiums-and-deductibles