86% of Americans Over 50 Are Afraid to Spend Their Retirement Savings. Waiting Until 70 Could Give Them a Bigger Social Security Safety Net
Most retirees grip their savings like a lifeline they're terrified to cut, but the real safety net may hinge on a single timing decision that, once made, cannot be undone.
Many people in their 60s and 70s spent decades building a nest egg and now can’t bring themselves to touch it. Prudential Financial (NYSE: PRU | PRU Price Prediction) surveyed 3,023 U.S. adults age 50 and older for its 2026 Retirement Pulse; 86% said they don’t feel free to spend their savings on things they enjoy.
Social Security adds to the unease. Among respondents, 44% worried about its future, while 66% preferred guaranteed income for life over a lump sum. The 2026 Trustees Report projects that the retirement trust fund’s reserves will run out in 2032, although incoming revenue would still cover about 78% of scheduled benefits.
Picture Linda, 67, with a well-funded IRA, a paid-off home and a $2,500 monthly Social Security benefit available to claim. She can afford to enjoy retirement, but the fear of outliving her savings keeps her from spending them.
How Three Years of Waiting Becomes a 24% Raise for Life
For anyone born in 1960 or later, full retirement age (FRA) is 67. Each year you wait past that earns delayed retirement credits worth 8% a year, and the credits stop at 70.
Waiting until 70 increases the monthly benefit by 24%, before inflation adjustments. For Linda, that takes her $2,500 payment to $3,100. The difference is $600 a month, or $7,200 annually, for the rest of her life.
One detail on timing: Social Security sometimes adds credits from the year you claim the following January, so the full amount may show up a few months late.
Inflation adjustments add another advantage to the larger benefit. Social Security’s announced 3.6% increase for 2027 would add $90 to a $2,500 monthly check or about $112 to a $3,100 payment. Both claiming options receive the same percentage adjustment, but the dollar increase is larger on the higher benefit.
A bigger guaranteed check gives her permission to spend. Every dollar of basic spending covered by a check that keeps up with inflation and lasts for life is a dollar her savings no longer have to protect. Groceries, utilities and property taxes come out of Social Security. The IRA becomes the money for the trips and gifts she keeps putting off.
What Waiting Costs Before It Pays Off
To delay, Linda needs three years of other income. If she lives on savings instead of her $2,500 check, she gives up about $90,000 in benefits, a loss many Prudential Financial respondents would dread. So to spend more freely later, she has to spend on purpose now.
At an additional $7,200 a year, Linda would recover the $90,000 in forgone payments after about 12.5 years, putting her around age 82½. That’s a simplified break-even calculation that doesn’t account for investment returns, taxes or inflation adjustments. Living longer generally favors the larger monthly benefit, while claiming earlier leaves more savings available during those first three years.
Claiming at 67 can make more sense for some retirees. Someone in poor health, or someone who would have to use up most of a small savings balance to get to 70, may do better taking at 67 and keeping some cash on hand.
Marriage gives couples another reason to wait. A surviving spouse at full retirement age generally gets 100% of the dead worker’s benefit, and all delayed retirement credits count toward it. When the higher earner waits until 70, the bigger check keeps going for whichever spouse lives longer.
Spend the Bridge Years on Purpose
The hardest choice to reverse is when you start benefits. Once Linda claims, that monthly amount mostly sticks with her for life. Withdrawals from savings can change every year. If she uses 67 to 70 as a planned bridge and takes a set amount from savings each month, spending becomes part of the plan instead of something to feel guilty about.
The share of your basic budget a guaranteed check covers often matters most. A careful retiree who knows a larger check that grows with inflation will pay her bills may finally feel safe enjoying the savings she already built. Health, marriage, taxes and how much you’d need to cover the gap can all change the math, so run your own numbers before you pick a date.
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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.
