Claim Social Security Early, Leave the IRA Until 73. That’s the Order Most Retirees Use. Reversing It Is Worth Real Money Over a 20-Year Retirement

Two retirees can leave work with identical balances, identical benefits, and identical life expectancies, then end retirement with materially different after-tax income based only on the order in which they tap each source. Withdrawal sequencing is the highest-value planning decision most households never make deliberately, and the default order almost everyone follows is close to the worst one available.

Why the Default Order Feels Right

The common sequence looks prudent: claim Social Security at 62, leave the IRA untouched to compound, and begin withdrawals only when required minimum distributions force the issue at age 73 under SECURE 2.0. Every step reads as caution, but this doesn’t mean you can’t or shouldn’t try moving forward.

Compounding Trap Behind the Default

The problem is what the untouched account does while it sits there. A balance that compounds for a decade produces a larger required distribution, and that distribution arrives as fully taxable ordinary income on top of a Social Security benefit already in pay status. The retiree spends the 60s in unusually low-income years without using them, then gets pushed into the highest-income years of their life in the 70s, precisely when the account is largest, and the tax cost of every dollar is greatest.

The consequences stack in three layers, as marginal brackets rise with taxable income: the 22% bracket for married joint filers begins at $24,800 of taxable income in 2026, with 24% starting at $211,400. A larger share of Social Security becomes taxable. The Medicare income-related monthly adjustment arrives as a cliff: cross $218,000 in modified adjusted gross income on a joint return, and the Part B premium jumps from $202.90 to $284.10 per person, with additional cliffs above. RMDs grow as a percentage of the balance every year, so the pressure builds rather than levels off.

Reversed Order, Concretely

Spend from the IRA in the years between leaving work and claiming Social Security, and delay the benefit. Three separate gains follow, and most coverage collapses them into one.

First, the benefit is permanently larger. Social Security increases by 8% for each year you delay claiming past full retirement age, up to age 70. Because every cost-of-living adjustment applies to the base being received, the delayed base carries a larger absolute COLA each year. The 2027 COLA is tracking toward 3.3%, and that percentage compounds on a bigger number for the rest of the retiree’s life.

Second, spending the IRA down in the bridge years leaves a smaller balance when RMDs begin, so the forced income is smaller for the rest of retirement. Third, the low-income years between work and Social Security contain empty space beneath the brackets. The 2026 standard deduction is $32,200 for joint filers, and the 12% bracket runs to $100,800 of taxable income. Roth conversions in those years exploit the same empty space (we sized up that quiet window between the last paycheck and the first RMD in a free Roth conversion guide).

Survivor Angle Most Households Miss

The higher earner’s claiming age sets the survivor benefit. A household that delays the larger check is buying longevity insurance for whichever spouse lives longer, and that transition arrives at the same moment filing status shifts to single, when brackets narrow sharply. A surviving spouse can receive the full delayed benefit amount if the deceased delayed past full retirement age. That interaction matters more than the base claiming math for many couples.

Constraints Nobody Names Out Loud

Reversed sequencing requires enough in accessible accounts to fund the bridge years. It is the wrong call for someone with a materially shortened life expectancy. Before Medicare eligibility at 65, larger IRA withdrawals raise the modified adjusted gross income used to price marketplace premium assistance. Anyone claiming while still working faces the earnings test. Watching a balance fall while deliberately forgoing a benefit check is behaviorally difficult even when the arithmetic favors it.

Over a 20-year horizon, the sequencing advantage widens when the delayed benefit’s COLA compounds on a larger base, when bridge-year withdrawals fill the 12% bracket, and when the eventual RMD stays beneath the $218,000 IRMAA threshold. It narrows when longevity falls short of average, when the account earns closer to the 5% currently available on 10-year Treasuries than to equity returns, or when marketplace subsidies are lost in the bridge years.

Question to Answer This Year

Pull the Social Security statement and record the benefit at 62, at full retirement age, and at 70. Estimate taxable income for each year between now and the earliest possible claiming date. Measure the room between that number and the top of the 12% bracket. That room is the annual budget for IRA withdrawals or Roth conversions you won’t be able to use next year. Sequencing is a rare planning decision with a deadline attached, because you can’t recover a year of unused low-income space.

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