Should You Delay Social Security?

The purpose of this article is to help you think clearly about when to claim Social Security - whether that’s 62, your Full Retirement Age, or as late as 70. I’ll walk through the key considerations that usually matter most: the opportunity cost of delaying, taxes, survivor protection, work income, longevity, and how portfolio withdrawals can change the math.

A practical way to think about the decision

Delaying Social Security can be valuable—but only if it improves your after-tax, after-risk retirement income plan.

My goal is to help you make the next right financial decision—then back it up with a coordinated plan and investment strategy.

To do that, I’ll use a straightforward framework to compare claiming now vs. claiming later (age 62, your Full Retirement Age, or as late as 70). Together, we’ll quantify the “bridge” trade-off—what you spend now versus what you may gain later—while factoring in taxes, survivor protection, and portfolio risk.

What you buy by waiting

• A bigger lifelong benefit (and stronger protection for a survivor).

• Longevity insurance you cannot outlive.

• A larger portion of retirement income that is not dependent on markets.

In plain terms: delaying can increase the size of your monthly check and can improve the household's floor of guaranteed income—especially important if you are the higher earner in a couple.

What it costs to wait: the bridge (opportunity cost)

Delaying means you will use other resources to replace the check you could have collected earlier. That replacement period is the bridge.

• Bridge size: how much income you need from other sources while you delay.

• Bridge length: how many years you are bridging (for example, from 62 to FRA, or from FRA to 70).

• After-tax reality: the bridge dollars may come from IRAs or 401(k)s, Roth IRAs, taxable accounts, or part-time work—each behaves differently.

Caution: do not overestimate the opportunity cost

A common trap is comparing delaying Social Security to an overly optimistic investment return assumption. If you use a high average market return to represent what your portfolio could earn instead, you can accidentally stack the deck against delaying.

A better comparison uses conservative inputs and keeps the math in the same units (real dollars and after-tax dollars).

• Use real returns, not nominal returns. Social Security is inflation-adjusted, so compare the bridge to inflation-adjusted (real) returns.

• Use after-tax, after-fee returns. The bridge may have tax drag depending on the account used.

• Match the time horizon. A 3- to 8-year bridge should not be evaluated using a 30-year stock market average.

• Use realistic compounding.

• Account for sequence risk.

• Avoid double counting inflation.

Practical rule: If your bridge plan requires optimistic returns to work, the plan is fragile.

Where should bridge funds reside?

Your bridge is a known near-term spending liability. In most cases, the safest approach is to fund it with assets designed for liquidity and principal stability, while coordinating those assets within a broader portfolio analysis and plan review.

A bond ladder can fluctuate on paper, but if held to maturity, the cash flow arrives when you need it.

Bridge funding options (plain-English pros and tradeoffs)

Treasury money market funds or Treasury bills are best suited for near-term bridge spending, typically covering the first 0 to 24 months. They offer high liquidity and minimal price movement, which makes them useful for known, short-term cash needs. The tradeoff is that yields change as interest rates move, and money market funds are not FDIC insured.

Defined-maturity bond ETFs (sometimes called target-maturity ETFs) can work well for bridge spending in later years when you want a simple, year-by-year structure without buying individual bonds. They provide diversification within each maturity year and are easy to implement. However, they do not guarantee a par value at maturity, their net asset value can move if you sell early, and they carry expenses and potential credit risk depending on the holdings.

FDIC-insured CDs, laddered by year, are a good fit when you want known maturity dates and predictable cash flow for each bridge year. They offer FDIC protection within limits and clear timing. The main drawbacks are early withdrawal penalties and the need to manage issuer limits across accounts.

Individual Treasury bond ladders are often used for years two and beyond in a bridge. They carry very low credit risk and allow maturities to line up closely with your spending timeline. The tradeoff is that market values can fluctuate if sold early, and the approach requires discipline to maintain the ladder structure.

High-quality individual bond ladders, such as investment-grade corporate bonds, can increase yield compared to Treasuries while still matching maturities to spending needs. These can be effective when used carefully, but they introduce credit risk and spread risk, so reaching for yield should be avoided.

TIPS ladders (Treasury Inflation-Protected Securities) can be useful for later bridge years or inflation-sensitive spending. They provide inflation-linked principal and are often the closest comparison to Social Security’s inflation adjustment. Prices still move with real interest rates, and in taxable accounts the inflation adjustment may be taxable even if you do not receive the cash yet.

Rule of thumb: If your bridge requires a specific dollar amount in a specific year, individual bonds or CDs held to maturity usually provide the cleanest match. If simplicity and diversification matter more, defined-maturity bond ETFs can be a practical middle ground.

When delaying often helps

• You or your spouse expect longer-than-average longevity.

• Survivor protection is a priority.

• You are the higher earner in a couple.

• Your tax plan benefits from smoothing income over time.

• You have adequate reserves or stable income to cover the bridge.

When claiming sooner may be prudent

• Health considerations suggest a shorter planning horizon.

• You lack adequate reserves for a bridge.

• You plan to keep working and need to coordinate earnings.

• Your tax situation favors earlier claiming.

If this feels complicated, do not guess

For many households, the right answer depends on earnings history, marital status, longevity assumptions, tax planning, and the assets available to fund a bridge.

Don’t guess—schedule a no-obligation Discovery Call before you file. We can coordinate with one of our partnered CFP® professionals and align the decision with your broader financial planning approach.

What you’ll walk away with

• A clear 62 vs FRA vs 70 comparison tailored to your household

• A bridge-funding plan that avoids relying on optimistic returns

• Tax-aware guidance on sequencing withdrawals

• A coordinated action plan you can understand and follow

Disclosure

All content is for information purposes only.The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Opinions expressed herein are solely those of Genesis Wealth Management Group, LLC and our editorial staff. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Investment advisory services offered through Genesis Wealth Management Group, LLC.