Delaying Social Security past your full retirement age earns you an 8% raise for every year you wait, up to age 70. That part of the story gets told constantly, and it’s true. What gets told far less often is what happens a few years later, when required minimum distributions kick in and your bigger benefit starts stacking taxable income on top of taxable income. Here’s the math nobody puts on the brochure.
The 8% Raise Everyone Talks About
First, the good news, because it really is good news. If your full retirement age is 67 (and it is, for anyone born in 1960 or later), every year you delay filing adds roughly 8% to your monthly benefit. Wait until 70 and your check is about 24% larger, for life, with inflation adjustments on top.
For someone whose benefit at 67 would be $2,400 a month, waiting until 70 pushes it to roughly $2,975. That’s an extra $6,900 a year, every year, for as long as you live. Hard to argue with.
But Social Security doesn’t exist in a vacuum. It lands on a tax return next to everything else you earn. And that’s where the second half of this story begins.
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What Is a Required Minimum Distribution?
A required minimum distribution, or RMD, is the amount the IRS forces you to withdraw each year from traditional IRAs, 401(k)s, and similar pre-tax accounts. The government let that money grow tax-deferred for decades. Eventually, it wants its cut.
Under current law, RMDs begin at age 73 if you were born between 1951 and 1959, and at age 75 if you were born in 1960 or later. The amount is your account balance at the end of the prior year divided by an IRS life expectancy factor. At 73, that factor is 26.5, which works out to a withdrawal of roughly 3.8% of the account.
Every dollar of an RMD counts as ordinary taxable income. You can’t skip it, either. Miss one and the penalty is 25% of the amount you should have taken.
How a Bigger Check and RMDs Stack Up
Here’s where the two stories collide. The IRS decides how much of your Social Security is taxable using a formula called combined income: your other taxable income, plus any tax-free interest, plus half of your Social Security benefit.
For a single filer, none of your benefit is taxable below $25,000 of combined income. Above $34,000, up to 85% of it can be taxed. (For married couples, those lines sit at $32,000 and $44,000.) Those thresholds were set decades ago and have never been adjusted for inflation, which is why more retirees cross them every year.
Say Carol delays her benefit to 70 and collects about $35,700 a year. Meanwhile, her untouched traditional IRA has grown to $800,000. At 73, her first RMD is about $30,000. Half her Social Security ($17,850) plus that $30,000 puts her combined income near $48,000. Run the formula and roughly $16,000 of her Social Security becomes taxable income, stacked right on top of the $30,000 RMD she had no choice about taking.
Carol did everything “right.” She just did it without looking at the whole board.
The Gap Years Are Your Best Planning Window
So is delaying Social Security a mistake? Usually not. The delayed credits are still one of the best deals in retirement. The mistake is delaying your benefit and letting your pre-tax accounts sit untouched at the same time.
The years between retiring and claiming, often 62 to 70, are a rare stretch when your taxable income is low and you control nearly every lever. That window is when many retirees:
- Draw down pre-tax accounts early. Spending IRA dollars in the gap years shrinks the balance that future RMDs are calculated on.
- Do Roth conversions. Moving money from a traditional IRA to a Roth means paying tax now, often at a lower rate, in exchange for tax-free withdrawals later and no RMDs at all.
- Mind the new senior deduction. Through 2028, taxpayers 65 and older can claim an extra $6,000 deduction ($12,000 for qualifying couples), which phases out above $75,000 of income for singles and $150,000 for joint filers. Keeping income below those lines preserves it.
There’s a pleasant bonus hiding in this strategy. Only half of your Social Security counts toward the combined income formula, while 100% of an IRA withdrawal does. Shifting more of your retirement income toward a larger Social Security check and away from forced withdrawals can lower your taxable income for the rest of your life.
The Bottom Line
The decision was never really “when should I claim Social Security?” It’s “how do all my income sources fit together over 30 years?” The claiming age, the withdrawal order, the conversion amounts, and the tax thresholds all move together, and changing one changes the others. This is exactly the kind of problem that’s nearly impossible to eyeball but straightforward to model. A good retirement planning tool that projects your taxes year by year will show you the trade-offs before you lock anything in.
One caveat before you go: this is educational content, not personalized tax or financial advice. The right move depends on your health, your accounts, and your bracket. Confirm your numbers with SSA.gov, IRS.gov, or a qualified professional before you act.
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