Retire at 62 With $500,000 in an IRA and Claim Social Security Right Away, and the IRA Keeps Growing Toward a Bigger RMD. Live on the IRA Until 70 Instead, and the Check Is …
Retiring at 62 with $500,000 in an IRA forces a choice that quietly shapes every paycheck for the next three decades, and the path most retirees assume is safer can leave serious money on the table.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
This piece compares two ways to retire at 62 with $500,000 in a pretax retirement account. One path claims Social Security right away and doesn’t touch the savings. The other lives on the IRA and holds off until 70 to claim. Under fairly ordinary assumptions, the second path often makes more lifetime income, but it isn’t always that simple.
Required Distribution Age for Today’s 62-Year-Olds
A required minimum distribution, or RMD, is the amount the IRS requires an account owner to withdraw from a tax-deferred retirement account each year once they reach a set age. Under current law, anyone who reaches age 74 after December 31, 2032, has an applicable age of 75. A person turning 62 in 2026 hits 74 after that cutoff, so 75 applies here.
Assumptions Behind Both Paths
The model assumes a full retirement age of 67 and a monthly benefit of $2,170 at that age, matching the government’s estimated average retired-worker check after the 2027 cost-of-living adjustment (COLA).
The IRA is assumed to earn 5% a year. Benefits are in today’s dollars, before future COLAs, and the retiree lives to 90. Claiming at 62 cuts the monthly check by 30% for life, to $1,519. Each year of delay past full retirement age adds 8%.
At 70, the check reaches 124% of the full amount and stops growing, so it comes to $2,691. On the second path, the model assumes the retiree withdraws $32,000 from the IRA at the start of each year from 62 through 69. That’s about what the age-70 check will pay in a year.
| Result | Claim at 62 | Claim at 70 |
|---|---|---|
| Monthly check | $1,519 | $2,691 |
| IRA balance entering age 75 | $942,825 | $533,330 |
| First RMD | $38,326 | $21,680 |
| Benefits collected through age 90 | $510,384 | $645,840 |
To calculate the initial required withdrawal, divide the IRA balance by the IRS Uniform Lifetime Table factor for age 75 (24.6). In this model, total benefits on the delayed path pull ahead at about age 80.
Why Delaying Often Comes Out Ahead
The bigger check reduces the risk of outliving your savings. It lasts for life, and every future COLA, such as the 3.6% increase set for 2027, is applied to a larger starting amount. Drawing down the IRA earlier in retirement also means smaller required withdrawals later on.
Taxes affect both paths. To find out whether benefits are taxable, the IRS adds half of a retiree’s benefits to all other income, a total often called combined income (Publication 17). Up to half of benefits can be taxed once that total passes $25,000 for single taxpayers. Up to 85% can be taxed once it passes $34,000.
The joint-filer thresholds are $32,000 and $44,000. On the early-claiming path, a large RMD lands on top of the benefit check, so more of each check becomes taxable. On the delayed path, taxable income from 62 to 70 comes from IRA withdrawals the retiree can size. Those withdrawals fill the low tax brackets, which is the same room a Roth conversion would use. Conversions can be added onto this approach.
Survivor Protection for a Spouse
When a worker dies, the survivor benefit includes the delayed retirement credits the worker earned. That means holding off until 70 locks in a larger check for a surviving spouse for the rest of that spouse’s life.
Cases Where Claiming at 62 Makes Sense
Early claiming can fit someone in poor health or with a short life expectancy, someone who has no savings to live on until 70, or a household where a spouse’s claiming plan changes the math. Funding risk is another factor. The 2026 Trustees Report projects the combined trust funds will run out in the third quarter of 2034, after which 83% of scheduled benefits would be payable. That shortfall would hit both paths.
Health Coverage Gap Before 65
Medicare coverage generally starts at age 65. Before then, many early retirees buy coverage through the ACA marketplace, where premium tax credits (the subsidies that lower monthly premiums) depend on modified adjusted gross income (26 U.S.C. § 36B(d)(2)(B)). IRA withdrawals count toward that income (26 U.S.C. § 408(d)(1)). So withdrawals taken from 62 to 64 can reduce premium assistance, and some retirees plan around that.
Calculation to Run Before Filing
Before filing for benefits, some retirees run their own numbers. That process starts with benefit estimates at 62, 67, and 70 from a Social Security record. The next step projects the IRA balance at 75 under each path, divides it by 24.6 to calculate the initial required withdrawal, and adds in the tax on benefits and any change in marketplace premiums. A fuller comparison looks at total after-tax income over a realistic lifetime for both spouses (we condensed the 62 versus 67 versus 70 question into a free one-page framework here).
Contact [email protected] for any questions or corrections.