The decision to wait until 70 to claim Social Security is usually framed as a math problem the retiree already won. Every year of delay past full retirement age lifts the benefit by roughly 8%, and the credit is guaranteed by the federal government. What the 8% pitch tends to leave out is what happens on the other side of the ledger. A retiree who defers benefits while leaving a $600,000 traditional IRA untouched banks a larger check and simultaneously compounds a larger required minimum distribution that will begin a few years later.
The 8% Credit, in Context
For each year a worker delays claiming beyond full retirement age, up to age 70, the monthly benefit increases by 8%. Cost-of-living adjustments then compound on that larger base. The 2026 COLA came in at 2.8%, and CPI-W, the index that drives the adjustment, sat at 328.8 in May 2026. Against a 10-year Treasury yield of 4.54%, an 8% guaranteed uplift with inflation indexing is difficult to replicate in a taxable account. That is the case for waiting, and it holds up on its own terms.
Where the RMD Enters
Under current rules, required minimum distributions from traditional IRAs and 401(k)s begin at age 73. A 70-year-old who has just filed for Social Security still has three years before the first mandatory withdrawal. If the $600,000 balance is left to grow rather than tapped for living expenses over those three years, the base against which the RMD is calculated grows with it. At a 6% annual return, $600,000 becomes roughly $714,600 by age 73. Using the IRS Uniform Lifetime Table divisor of 26.5, the first RMD moves from about $22,600 to roughly $27,000.
That gap widens each subsequent year as the divisor shrinks and the balance continues to earn returns net of the withdrawal. The 8% credit and the growing RMD are outcomes of the same choice: keeping the tax-deferred account intact while the delayed benefit accrued.
The Tax Bracket Collision
The interaction shows up on the tax return. For a single filer in 2026, the standard deduction is $16,100, the 22% bracket begins at $50,401, and the 24% bracket begins at $105,701. A maximized Social Security benefit combined with a $26,966 RMD can push a retiree who previously sat in the 12% bracket into the 22% bracket, and up to 85% of the Social Security benefit becomes taxable once combined income clears the relevant thresholds.
The calculator above models the delayed-claim scenario. The RMD is a separate lever that stacks on top of it once you reach age 73.
What the Household Data Shows
Average annual expenditures for households headed by someone 65 and older were $65,354 in 2024. Per capita disposable personal income reached $68,391 in the first quarter of 2026, while the personal savings rate sat at 3.9%. For a retiree drawing on Social Security plus an RMD, the combined amount often exceeds spending needs, meaning part of the mandatory withdrawal is taxed and then redeposited into a taxable account.
What the Trade-off Looks Like
Two variables are being optimized against each other. The 8% delay credit rewards, leaving the Social Security claim alone. Spending down the traditional IRA between full retirement age and 73, or making partial Roth conversions during those years, reduces the base used to calculate RMDs. Doing both at once requires spending from taxable accounts or cash reserves in the interim.
The retiree who waits until 70 without touching the $600,000 gets the higher benefit and the higher RMD. The retiree who taps the IRA in their 60s to fund the delay window arrives at 73 with a smaller balance and a smaller mandatory withdrawal, at the cost of a smaller portfolio buffer along the way. Both paths produce the same 8% credit. They produce different tax bills.
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