Retirees who reach their early 60s with roughly $500,000 in a traditional IRA and a Social Security benefit on the way face a sequencing decision that quietly determines whether their portfolio lasts. The choice is whether to leave the IRA alone and start Social Security at 62, or spend the IRA first and let the Social Security benefit grow until 70. The dollar difference over a typical retirement runs well into six figures.
What the Claiming Age Actually Does to the Check
The Social Security benefit formula is fixed by two variables: a wage-indexed average of the 35 highest-earning years, and the age at which the retiree claims. Claiming at 62 permanently reduces the benefit by up to 30% relative to the full retirement age amount. Waiting past full retirement age adds about 8% per year until age 70, which produces a roughly 24% increase for someone whose full retirement age is 67. Those adjustments are locked in for life, and every year the cost of living adjustment compounds on the larger number. The 2026 COLA came in at 2.8%.
For a worker whose full retirement age benefit is $2,000 per month, claiming at 62 yields about $1,400 per month. Waiting until 70 raises the same underlying benefit to roughly $2,480. That is a monthly gap of about $1,080, before any COLA is applied.
Why Spending the IRA First Pays
The bridge strategy works because the return on delaying Social Security is guaranteed, paid in inflation-adjusted dollars, and set by statute rather than markets. Compared with the alternatives available for safe money, the 8% delay credit is difficult to match. The 10-year Treasury yield sat at 4.54% on July 9, 2026, near the high end of its recent range. The national average 12-month CD paid 1.65% APY as of June. Neither carries an automatic inflation adjustment.
Traditional IRA balances also have mechanics that reward early withdrawals. Every dollar withdrawn is taxed as ordinary income, required minimum distributions begin at 73, and the account carries market risk on whatever balance stays invested. Drawing down the IRA during the years before Social Security starts fills the low tax brackets left by the absence of a benefit check, reduces future RMDs, and allows the largest inflation-protected income stream most retirees will ever receive to grow to its maximum size. (For a walkthrough of how the sequence changes the tax bill in the first year of retirement, see The First-Year Tax Bomb.)
The Six-Figure Gap
Take the same $2,000 full-retirement-age benefit. A retiree who claims at 62 collects about $1,400 per month; one who waits until 70 collects about $2,480. Over the 20 years from age 70 to 90, that difference totals roughly $259,200, before COLA compounding. Even over a shorter 15-year period to age 85, the gap is about $194,400. Both are six-figure numbers, and both understate the outcome once 2.8%-style COLAs compound on the higher base year after year. The breakeven point between claiming early and claiming late generally falls in the late 70s to early 80s.
How the Withdrawal Order Actually Runs
Financial planner Suze Orman has walked through a version of this on her podcast. In one case, a 64-year-old retiree with a $253,000 traditional IRA, a $52,000 Roth IRA, and a $71,000 brokerage account was waiting until age 70 to file for Social Security, withdrawing $500 per month from each of the three accounts. Her advisor’s default sequence: Roth IRA first, then brokerage, then traditional IRA. For someone bridging to 70, the traditional IRA often moves earlier in that queue, because the low-income years before the benefit starts are the cheapest time to pay tax on those dollars.
The macro backdrop makes the choice more consequential. The personal savings rate fell to 3.9% of disposable income in the first quarter of 2026, according to the Bureau of Economic Analysis. Social Security transfer receipts ran $1,630.3 billion in that quarter, the largest component of household transfer income.
What the Data Supports
Spending the IRA in the 60s and delaying Social Security until 70 is not the right sequence for every retiree. It requires enough in the IRA to cover roughly 8 years of expenses, reasonable health and family longevity, and comfort with a smaller portfolio in exchange for a larger guaranteed income floor. For a retiree with roughly $500,000 in a traditional IRA and a benefit large enough to make delaying worthwhile, the six-figure spread in lifetime Social Security income is what the math yields when the order is reversed from the default.
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