Is Delaying Social Security Using 401(k) ‘Bridge’ a Viable Option For You?

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If you’re nearing retirement age, or planning for the future, you may not know that you don’t have to take Social Security benefits as soon as you turn 62 if you are retired. Experts call such a deferral the Social Security “bridge” strategy. Opting for a bridge strategy can help middle-class Americans with other retirement investments to max out their Social Security benefits — largely by waiting until they are 70, or closer to 70, to begin taking a monthly Social Security check.

What Is a Social Security Bridge?

First, let’s explore the definition of a Social Security bridge. Instead of claiming Social Security benefits at age 62 when you retire, you live off other savings and investments, such as a 401(k) or Roth IRA. These benefits “bridge” the gap between your retirement age and age 70, when you would start receiving the maximum benefit from Social Security.

Are You Retirement Ready?

You can begin withdrawing from a 401(k) without penalties as soon as you turn 55 — provided you did not retire prior to age 55 — so those who are considering retirement before age 62 might need to “bridge” their pay with other savings or investments until they can collect a greater Social Security benefit. But waiting until age 70 could help ensure that you have enough funds to last your entire retirement, especially if you live a long life and intend to enjoy retirement by traveling or participating in costly hobbies.

When you use a bridge, you withdraw funds from your 401(k) or other retirement account as soon as you’re able to do so without penalties. This amount should match the amount you would be receiving if you filed for Social Security benefits when they became available at age 62. The average Social Security benefit for 62-year-old recipients is $1,130, according to

Is a Bridge Strategy the Right Choice for You?

Alicia Munnell, the director of the Center for Retirement Research at Boston College, says enacting a bridge strategy could be a smart choice for some. In her paper, “How Best to Annuitize Defined Contribution Assets,” she outlines multiple scenarios where a Social Security bridge could help Americans maintain enough money for retirement without running out of funds before they die.

Are You Retirement Ready?

Munnell’s research found that about one-third of workers could benefit from a social security bridge, Financial Advisor Magazine reported. She identified people in the 50th to 75th wealth percentile — or middle-to-upper-middle class, with roughly $250,000 or less in retirement savings — as those most likely to benefit from a Social Security bridge.

“The bridge option would use 401(k) assets to pay retirees an amount equivalent to their Social Security benefits so they can postpone claiming benefits, thereby increasing their monthly payment when they do eventually claim,” Munnell’s report said.

In a sense, retirees are purchasing a larger Social Security income simply by waiting to claim their benefits. This helps risk-averse investors earn more in their retirement, without paying money into annuities, insurance, or another retirement fund.

Presumably, you’ve paid into Social Security your entire working life. Now, you can increase the return on your investment by waiting to claim the benefit. Depending on how long you live, the math works out to a larger payout, Munnell’s research showed. And there’s no risk to the investment, since you aren’t choosing funds that fluctuate with the whims of the market.

Are You Retirement Ready?

“Purchasing additional Social Security income does not involve handing over accumulated assets to an insurance company, provides a familiar form of lifetime income that is adjusted for inflation, and does not expose the purchaser to higher costs from adverse selection,” the report stated.

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