Why a 62-Year-Old Engineer With $1.4 Million Is Tapping His 401(k) Before Social Security Despite the 'Wait Until 70' Advice

A 62-year-old retiree with $1.4 million in a traditional 401(k), $250,000 in a taxable brokerage, and $80,000 in cash plans to spend $85,000 per year. Social Security would be $3,180 per month at full retirement age of 67 and $3,943 per month if claimed at 70, a 24% increase. Delaying Social Security requires funding the eight-year gap. Using cash and brokerage first can preserve the 401(k) but may push larger required minimum distributions at 73 into higher tax brackets. Drawing from the 401(k) between 62 and 70 can lower the future RMD base and pull pre-tax dollars at depressed rates while Social Security grows about 8% per year past full retirement age.

"The case for delaying Social Security only holds if the bridge years are funded efficiently. Pulling from cash and brokerage first while leaving the 401(k) untouched feels conservative, but it leaves the most expensive tax problem for later. The 401(k) keeps compounding, then collides with required minimum distributions at 73, often in a higher bracket than the retiree ever paid while working."

"The alternative is to draw the 401(k) aggressively between 62 and 70. Three things happen at once, as pre-tax dollars get pulled at depressed rates, while there is no salary and no Social Security in the picture. The future RMD base shrinks because the balance is smaller, and the Social Security benefit grows at about 8% per year for each year of delay past full retirement age, a return no fixed-income alternative comes close to matching, with the 10-year Treasury near 4.489%."

"In year one, he withdraws $85,000 from the 401(k) and has no other income. Subtract the 2026 single-filer standard deduction of $16,100. Taxable income lands near $68,900. That income runs through the 2026 brackets: 10% up to $12,400, 12% up to $50,400, and 22% above that up to $105,700."

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