Tip #7: Build a Strategic Bridge to Support Your Retirement Income
Deciding to delay your benefits requires a remarkably solid, actionable plan to generate cash flow during the inevitable waiting period. You must build a secure income bridge that successfully carries you from your final day of work to the day you finally claim your maximized Social Security check. This bridge strategy protects your current lifestyle while allowing your government benefits to grow untouched behind the scenes.
You can effectively fund this critical gap period by intelligently tapping into your personal investment accounts, such as your 401(k), traditional IRA, or standard brokerage accounts. Drawing down these specific accounts early in retirement reduces your future required minimum distributions, which can drastically lower your overall tax burden later in life. You can work closely with a financial advisor to determine the optimal, safe withdrawal rate that sustains your household without depleting your principal too quickly.
Many modern retirees also successfully choose to work part-time, consult in their former industry, or monetize a lifelong passion project during these bridge years. This gentle, phased approach to retirement provides just enough cash flow to cover your daily expenses without the overwhelming stress of a forty-hour corporate workweek.
By purposefully and carefully designing this financial bridge, you grant yourself immense flexibility. You give your future self the profound, life-altering gift of a fully maximized, stress-free, lifelong retirement income.
As a CPA for over 30 years, I have had numerous clients where we had to make this decision. The ONLY situations where the client was better off delaying taking the payment was where they were continuing working.
You read that correctly.
Because of the government’s policy of reducing the Social Security benefit, Under no other scenario did it turn out better to delay taking their Social Security benefits.
Why?
Tax rates rarely went down. Between investments, part time work, and other factors (like inflation and state rate hikes), taxes actually increased during the retirement.
As the article itself says, the breakeven point after investing the excess funds (a total of $84,000+) is between 78-82. The combined number for men and women just hit 79. If all of the benefits begin at the same time as the average person dies, it makes no sense to delay taking your Social Security. You should note that the Chart showing the breakeven point does not accurately reflect those facts.
Do I take social security next year in June when I turn 67. I am retired and not working?
I retired at 64 to take care of my wife that had just had neck fusions front and back. I knew I would make less than at full retirement age, but weighed the difference and decided that 64 was right for me. I was already a retired Marine and had just retired as a County Deputy. I’ve been retired 9 years now and am extremely happy I retired early. What I would have lost by not retiring until 70, would have taken decades to get back, IF I would have lived long enough.
ABSOLUTELY!@@
Good information
My husband retired at 65 due to being ill should we had signed up for ssi disability?
I do turn 67 in June. Thankfully my health has been improving due to some good and forced choices. The plan is to start receiving my money back from social security on my birthday and pay off all my high interest loans through a debt avalanche. That will take a year. Then pay down our house another 4 years plus invest so we have approximately 100,000 in the bank with all debt paid.