Maximizing Social Security: Factors to Consider When Taking Benefits Early


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In today’s lesson, we delve into the topic of taking Social Security benefits early. While our previous videos and case studies often emphasize the benefits of delaying benefits until age 70, it’s important to acknowledge that each individual’s situation is unique. In this blog post, we’ll explore two case studies that shed light on scenarios where taking Social Security before age 70 might be a sensible choice. By examining various factors and considerations, we aim to help you make informed decisions about your Social Security benefits.

Factor to Consider When Taking Social Security Early #1

IRA Size and Income Needs: When deciding whether to delay Social Security, one crucial factor is the size of your IRA (or 401k) and its ability to sustain your monthly income needs. If you choose to delay benefits, you may need to rely on your IRA funds during the gap between retirement and starting Social Security. Balancing the withdrawal rate from your IRA with the income required is a vital consideration.

Factor to Consider When Taking Social Security Early #2

Federal Income Tax Implications: Delaying Social Security benefits offers the opportunity to receive a larger monthly check at age 70. It also provides a window for Roth conversions, potentially increasing your income and taxes in the interim. By carefully managing your tax situation, you can optimize your retirement savings and create a lower-tax retirement plan beyond age 70.

Case Study 1: IRA Size and Income Need

Let’s consider a hypothetical couple with a $620,000 IRA and a monthly income need of $7,000. If one spouse has already started receiving Social Security benefits at $1,000 per month, the remaining $6,000 must be withdrawn from the IRA if they choose to delay benefits. However, depleting the IRA entirely may not be ideal, considering their income needs and the potential longevity of their retirement. By evaluating various scenarios and tax implications, a more balanced approach can be devised.

Case Study 2: Younger Couple with a Larger IRA

In this example, a couple retires early, and one spouse is 65 while the other is two years younger. They have a more substantial IRA balance but require a smaller monthly income. Initially, they start living off Social Security while withdrawing funds from the IRA. However, when the younger spouse turns 65 and becomes eligible for Medicare, their tax situation changes. Considering factors such as federal taxes and required minimum distributions (RMDs), it may be beneficial for the spouse with the smaller Social Security check to start receiving benefits early.

Considering the Whole Picture

When analyzing Social Security decisions, it’s crucial to take into account various factors, including spousal benefits, the size of retirement savings, and the required income to sustain your lifestyle. Rather than viewing Social Security in isolation, a comprehensive financial planning approach considers the broader implications and aims to optimize your retirement outcomes.


Deciding when to take Social Security benefits is a significant decision that impacts your financial well-being throughout retirement. While delaying benefits until age 70 is often recommended, there are situations where taking benefits early can be advantageous. By carefully assessing factors such as IRA size, income needs, and tax implications, you can make an informed choice that aligns with your specific circumstances. Remember, seeking professional advice tailored to your situation is crucial in navigating the complexities of Social Security and maximizing your retirement benefits.

Social Security Early

In this informative video, financial planning experts Hans Scheil and Tom Griffith delve into the intricacies of taking Social Security benefits early. They emphasize that early, in this context, refers to any time before the age of 70. While their previous videos often advocated for delaying benefits, they acknowledge that individual circumstances vary and sometimes it may be beneficial to start receiving benefits earlier. Through two detailed case studies, Hans and Tom illustrate different scenarios where taking Social Security before 70 may be a viable option. They address factors such as the size of the individual’s IRA or 401(k), income tax implications, and the overall income needs of retirees. By considering all seven key factors, including government programs and individual circumstances, they provide tailored recommendations to help viewers make informed decisions about their Social Security benefits. To supplement the video, Hans and Tom provide show notes available in the video description or on their website. These notes include a visual aid, a snapshot of a Social Security statement, and highlighted key details for further examination. They encourage viewers to review these resources to better understand the discussed concepts. Hans and Tom emphasize that Social Security decisions are highly impactful for one’s retirement and should not be approached with a one-size-fits-all mentality. They stress the importance of comprehensive financial planning and highlight the lifelong nature of Social Security benefits. The goal is to optimize benefits while considering factors such as spousal benefits, IRA size, income needs, taxes, and long-term financial stability. While the case studies presented are hypothetical, they demonstrate how different circumstances and age differentials can influence the decision-making process. Additionally, they mention the potential benefits of Roth conversions and reducing future tax burdens. Hans and Tom conclude by reiterating their availability to discuss individual situations and provide personalized advice. Whether you’re considering early Social Security benefits or seeking a comprehensive financial plan, their expertise can help guide you toward a more secure retirement. Join them as they explore the complexities of Social Security and empower you to make informed choices.

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