His Planner Said Never to Spend Principal. Protecting the 401(k) Prompted Him to Claim Social Security at 62.
The rule felt responsible: protect the 401(k), claim Social Security early, and never touch principal. But for millions of retirees, that instinct quietly sets a trap that follows them for life.
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The Instinct That Feels Responsible
Picture a 62-year-old with a healthy 401(k), a paid-off house, and an old financial-planning rule ringing in his ears: never spend principal. He needs income. Social Security is available, while the 401(k) feels untouchable. He files early and lets the smaller monthly check cover the gap. That instinct is extraordinarily common, and it is also surprisingly costly.
A June 2026 Decumulation Planning Gap Study from Corebridge Financial (NYSE:CRBG | CRBG Price Prediction), conducted by Greenwald Research across 2,210 adults aged 45 to 79 with at least $100,000 in investable assets, found that only 28% of respondents felt comfortable watching their retirement savings decline to cover living expenses. A striking 70% considered preserving the nest egg very important, and fewer than one in three pre-retirees aged 55 and older had any plan at all for drawing down savings. Separately, 61% said they viewed retirement as a time to enjoy themselves, yet 50% expressed uncertainty about spending their savings to do so. On retirement forums, people in their early 60s describe the same tension: they have enough saved but cannot bring themselves to watch the balance fall.
The reflex feels disciplined. In practice, it can lock in a permanently smaller inflation-adjusted benefit and reduce what a surviving spouse receives for the rest of their life.
What Claiming at 62 Actually Costs
Social Security uses two main ingredients to set the monthly check: a worker’s earnings history and claiming age. For someone with a full retirement age (FRA) of 67, which applies to anyone born in 1960 or later, claiming at 62 reduces the benefit by approximately 30%. Waiting beyond 67 adds delayed retirement credits of 8% per year until 70.
Consider a worker whose full benefit at 67 would be $2,400 a month. Filing at 62 shrinks it to approximately $1,680. Waiting until age 70 raises it to about $2,976. The difference between those two checks is nearly $1,300 a month. That does not make waiting cost-free: the worker must replace eight years of benefits between 62 and 70 using savings, work, a spouse’s income, or some combination. The central question is whether spending part of the 401(k) during those years buys enough additional lifetime Social Security income to justify the withdrawal. In dollar terms, SSA data for December 2025 shows the average monthly benefit for a 62-year-old beneficiary was $1,424, compared with $2,016 for a 67-year-old beneficiary, a gap of roughly $592 that becomes permanent on the day someone files early.
Cost-of-living adjustments (COLAs) widen that dollar gap over time. The 2026 COLA, set by the Social Security Administration at 2.8%, illustrates the compounding effect clearly. Applied to the average $1,424 check at 62, that adjustment adds roughly $40 a month. Applied to the average $2,016 check at 67, it adds approximately $56. The same percentage keeps landing on two very different bases, so the income gap widens every single year. The survivor calculation raises the stakes further for couples. If the higher earner dies first, the surviving spouse can generally receive the higher of the two household benefits, not both. An early claim limits that survivor payment, while delayed retirement credits increase it.
Why the 401(k) Bridge Is Worth Considering
For someone with sufficient savings, the logic can be reversed. Drawing from the 401(k) between 62 and 67 or 70 may purchase a permanently larger, inflation-adjusted Social Security benefit. The account balance falls during the bridge years, but the money is not disappearing without purpose. It is financing retirement, which is exactly what the account exists to do. In exchange, the household receives a larger lifetime income stream that does not rise and fall with the stock market. According to a July 2025 report from the Bipartisan Policy Center, “Hedging the Risk of a Longer-than-Expected Life,” delaying from age 62 to age 70 can boost monthly benefits by approximately 77%, and for people who reach average life expectancy or beyond, using retirement assets to delay claiming results in more wealth preservation than claiming early. The typical break-even point for delaying from 62 to 70 falls somewhere between age 78 and 82.
That trade still carries real risk. Traditional 401(k) withdrawals are taxable, and liquidating investments during a market downturn can permanently damage a portfolio. Someone in poor health, or without enough savings to withstand a prolonged decline, may be better served by claiming earlier. The bridge strategy is worth modeling carefully rather than treating as yet another universal rule.
What to Work Through Before Filing
Three questions matter most:
- Run the survivor calculation. If one spouse is likely to depend on the higher earner’s benefit for many years, that person’s claiming age may matter more than any individual break-even calculation.
- Price the bridge after taxes. Estimate the 401(k) withdrawals required, the income tax they generate, and the balance remaining under weak-market scenarios. Compare the results against the monthly Social Security benefit available at 62, 67, and 70.
- Separate discomfort from danger. Watching a retirement account decline can feel like something has gone wrong. A planned drawdown that purchases a larger lifetime benefit is fundamentally different from uncontrolled spending.
Never spend principal can be a useful guardrail, but it is not a hard-and-fast rule. Retirement savings are not a museum exhibit meant to remain untouched forever. For the right household, spending some of the 401(k) first may be precisely what protects the income that must last the longest.
Editor’s note: The December 2025 average Social Security benefit figures in this article have been corrected to $1,424 per month at age 62 and $2,016 per month at age 67, per SSA data, replacing prior figures that overstated both amounts and the gap between them. The COLA dollar illustration has been updated accordingly, and the Bipartisan Policy Center bridge-strategy finding has been expanded to include the BPC’s July 2025 report conclusion that delaying from 62 to 70 can increase monthly benefits by approximately 77%.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
