Should you draw down your 401(k) to delay Social Security? The answer is simple — but only if you know this number

Vishesh Raisinghani

Thu, September 10, 2026 at 1:45 PM GMT+3 5 min read

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It's a critical decision and you only have one shot at it. Sometime in your 60s you'll probably have to choose between claiming your Social Security benefit or delaying it by drawing down your 401(k) instead.

Thousands, if not tens of thousands of dollars are at stake and most financial experts can give you multiple different variables, from market returns to life expectancy, that can complicate the decision further.

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It's easy to get analysis paralysis with all the online calculators on breakeven ages, tax considerations and expectations of market returns. But the decision can be simpler if you focus on one number: 8%.

Here's why this number could be the crucial breakthrough you're looking for.

Delayed credits

Beyond full retirement age, which is 67 for anyone born after 1960, your benefits increase at an annual pace of 8%, according to the Social Security Administration (1). It's important to note that these credits are calculated on a monthly basis, so your benefit will be slightly larger even if you delay your claim by a single month beyond this age.

It's also important to remember that this is a guaranteed gain. The assets in your 401(k) may or may not be able to keep up with this fixed return. For instance, the S&P 500 has delivered an average return of 10% historically, per Fidelity (2), but there's simply no way to predict if this is the return you'll enjoy between the ages of 67 and 70.

For that reason alone, the delayed retirement credits could be worth drawing down your 401(k) assets. In fact, delaying benefits until the age of 70 is beneficial for 90% of U.S. workers, according to a 2022 paper by David Altig, chief economic advisor at the Federal Reserve Bank of Atlanta (3). The math simply favors taking the delayed credits.

Nevertheless, millions of Americans end up taking their benefits early, either because of financial necessity or lack of awareness. Waiting three extra years without a monthly benefit check is easier said than done for many people.

If you're struggling to bridge the gap, here's how you can make it easier.

How to bridge the gap

If you're anxious about covering living expenses between retirement and a delayed Social Security claim, there are a few ways to bridge the gap. A robust medium-term fund held in hard assets, such as gold, could serve as that bridge.

Gold is traditionally considered a safe haven, which makes it ideal for parking excess cash that you can deploy during this transition period of early retirement. Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.

With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.

If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.

Working with a professional financial advisor could also be the savvy money move to plan this phase of your retirement. A platform like Empower can help reduce the stress of filing taxes by connecting you with a licensed tax professional who can support you from start to finish.

Unlike standalone tax software, Empower lets you manage your multiple retirement accounts in one dashboard and lets you file from the same platform.

Even if you're not an Empower client, you can still file taxes through Empower by creating a free Empower Dashboard to get started.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.

Simply answer a few questions about your savings, retirement timeline and overall investment portfolio.

From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.

You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.

WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.

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Article Sources

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Social Security Administration (); Fidelity (); National Bureau of Economic Research ()

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.