67-Year-Olds With $330,186 in Retirement Accounts Should Spend It First, Not Social Security

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 approach is better known as the bridge strategy. The idea is to use retirement account assets to fund living expenses from 67 to 70, then turn on a larger, inflation-protected Social Security check that lasts for the rest of life. The math is straightforward, but the trade-off involves real cash flow pressure during the bridge years, which is why the strategy 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 already collecting. A larger starting check means a larger annual dollar adjustment in every year to follow, and early projections put the 2027 COLA near 3.8%, which would add still more to the benefit of a delayed claim.

The average Social Security retirement benefit reached $2,086 per month as of July 2026, according to the SSA’s Monthly Statistical Snapshot. A worker who waits from 67 to 70 would convert that into roughly $2,587 per month in today’s dollars, an extra $501 every month for life. Over a 20-year retirement, that translates to close to $120,000 in additional guaranteed income before accounting for the compounding effect of 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 $75,000 in checks that could have been 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 2026 How America Saves report, covering year-end 2025 data from 4.6 million participant accounts, puts the average retirement account balance for participants age 65 and older at $330,186. The median is considerably lower, at $103,202, because 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 a retirement account 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 generally spend less than the national average, but costs for housing, healthcare, and food do not decline as quickly as the headline number might suggest. A 67-year-old running the bridge strategy typically pulls $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 unfolding at a moment when household finances are stretched. The personal savings rate fell to 2.7% in June 2026, according to the Bureau of Economic Analysis, down sharply from 4.5% at the start of the year. Pre-retirees entering the bridge years arrive with less surplus cash than their counterparts did just a few years ago, which makes the 401(k) drawdown feel sharper than the math alone suggests.

Why the Trade Still Pencils Out

Three considerations explain why advisors keep recommending this 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 is, in effect, a purchase of longevity insurance.

There is also a meaningful 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 benefits and required minimum distributions overlap. After age 59.5, distributions are exempt from the 10% early withdrawal penalty, so the only friction is the ordinary 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 calculation shifts in favor of waiting. The data points to a larger lifetime income stream; the only real uncertainty is how many years there will be to collect it.

Editor’s note: This article was updated to reflect the average Social Security retirement benefit of $2,086 per month as of July 2026, per the SSA Monthly Statistical Snapshot, and to incorporate Vanguard’s 2026 How America Saves report (year-end 2025 data), which shows an average retirement account balance of $330,186 and a median of $103,202 for participants age 65 and older. The personal savings rate figure was also refreshed to 2.7% for June 2026, per the Bureau of Economic Analysis.

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