67-Year-Olds With $330,186 in Retirement Accounts Should Spend It First, Not Social Security
Quick Read
-
Waiting until 70 to claim Social Security locks in a permanent 24% boost, converting the average benefit into $2,568 monthly for life.
-
The bridge strategy requires drawing between $40,000 and $60,000 annually from a 401(k) for three years, but it converts a volatile asset into guaranteed, inflation-adjusted income.
-
The math only works for retirees who outlive their early-80s break-even point; those in poor health are better off claiming Social Security immediately.
-
Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.
At 67, an American reaches full retirement age for Social Security. The check is available, indexed for inflation, and guaranteed for life. Yet a growing number of financial planners argue that the smartest move at 67 is to leave Social Security alone and spend down the 401(k) instead. The reason sits in a single number from the Social Security Administration: for every year a worker delays claiming past full retirement age, the monthly benefit grows by about 8% until age 70.
That is better known as the bridge strategy. Use retirement account assets to fund living expenses between 67 and 70, then turn on a larger, inflation-protected Social Security check that lasts the rest of life. The math is straightforward, but the trade-off involves real cash flow during the bridge years, which is why it remains the exception rather than the rule.
The 24% Premium for Waiting
For workers born in 1960 or later, full retirement age is 67. Claiming at 70 produces 124% of the full retirement amount, a permanent 24% increase that also serves as the base for every future cost-of-living adjustment. The 2026 COLA is 2.8%, applied to whatever benefit a retiree is collecting. A larger starting check means a larger annual dollar adjustment.
Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.
The average Social Security retirement benefit for a retired worker in January 2026 is roughly $2,071 per month. A worker who waits from 67 to 70 would convert that into roughly $2,568 per month in today’s dollars, an extra $497 every month for life. Over a 20-year retirement, that is close to $119,000 in additional guaranteed income before accounting for any compounding from future COLAs.
What the 401(k) Has to Cover
Bridging three years of Social Security has a real cost. At the average benefit level, the retiree forgoes about $74,500 in checks they could have collected between 67 and 70. That money has to come from somewhere, and for most households, the 401(k) is the only account large enough to do the job.
Vanguard’s most recent How America Saves report puts the average retirement account balance for participants age 65 and older at roughly $299,000, though median balances are much lower, around $95,000, since a small share of high-balance accounts pulls the average up. Either way, the typical 67-year-old who chooses to bridge would draw down between 20% and 30% of their 401(k) over three years, depending on how much of their living costs are covered by a pension, part-time work, or a spouse’s benefits.
The Spending Reality
The Bureau of Labor Statistics puts average annual household expenditures at $78,535 in 2024, the most recent full-year figure. Older households spend less than the national average, but spending on the basics, including housing, healthcare, and food, does not decline as quickly as the headline number suggests. A 67-year-old running the bridge strategy is typically pulling $40,000 to $60,000 a year from the 401(k), depending on how much of the household income picture is covered by a spouse already collecting.
That withdrawal pace is also happening at a moment when household finances are tightening. The personal savings rate sat at 3.9% in the first quarter of 2026, down from 6.2% two years earlier. Pre-retirees entering the bridge years have less incoming surplus cash, which makes the 401(k) drawdown feel sharper than the math suggests.
Why the Trade Still Pencils Out
Three considerations explain why advisors keep recommending the strategy despite the optics of spending retirement savings first. Social Security is a guaranteed, inflation-adjusted income stream backed by the federal government. A 401(k) is exposed to market returns, sequence-of-returns risk, and the retiree’s own withdrawal discipline. Converting a portion of a volatile asset into a larger fixed income stream effectively buys longevity insurance.
There is also a tax angle. Drawing from a traditional 401(k) before Social Security turns on lets a retiree fill the lower tax brackets with ordinary income while postponing the moment when Social Security and required minimum distributions overlap. After age 59½, distributions are exempt from the 10% early withdrawal penalty, so the only friction is the income tax owed on each dollar pulled.
The Limits of the Math
The bridge strategy assumes the retiree lives long enough to collect the larger check for a meaningful number of years. Break-even ages for delaying from 67 to 70 typically land in the early 80s. For a 67-year-old in poor health, claiming early and preserving the 401(k) balance for heirs is the better arithmetic. For a healthy 67-year-old with longevity in the family and enough in the retirement account to cover three years of expenses, the trade looks different. The data points to a larger lifetime income stream, while the years required to collect it remain uncertain.
If You’ve Been Thinking About Retirement, Pay Attention (sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance, and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor. Here’s how:
-
Answer a Few Simple Questions.
-
Get Matched with Vetted Advisors
-
Choose Your Fit
Why wait? Start building the retirement you’ve always dreamed of. Get started today! (sponsor)