Choosing when to take Social Security benefits can be a tough decision. Those who've saved for retirement in IRAs or other retirement accounts can consider taking money out of those accounts in order to put off starting to take Social Security. But is that a good idea?
In the following video from our Social Security Q&A series, Dan Caplinger, The Motley Fool's director of investment planning, answers a question from Fool reader Ron, who asks whether he can withdraw some of his IRA money rather than taking early Social Security benefits and therefore get bigger monthly checks later. Dan notes that using IRA money is definitely an option, and if it keeps you from having to claim Social Security as early as you otherwise would, then you'll typically be able to get a higher monthly benefit by waiting. But Dan notes that money taken from traditional IRAs and 401(k)s is taxable, while Social Security benefits aren't always included in taxable income, and so the decision also has tax consequences. Dan concludes that it's worth looking at both options to decide which is better for you.
How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.
Have general questions about Social Security? Email them to SocialSecurity@fool.com, and they might be the subject of a future video!
Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.