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Social Security: Is It Smart to Take IRA Withdrawals to Defer Benefits?

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.

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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!


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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