Should You Delay Social Security if You're Wealthy?
Here are three scenarios in which you might want to consider claiming Social Security benefits later if you have saved a significant chunk of change.


Saying someone is wealthy is like saying someone is happy. It’s subjective enough that I hesitated to even write this article. However, there are a few common themes that come along with wealth that impact when it may make sense to claim Social Security. For purposes of this article, we’ll say that “wealthy” means you have amassed at least $5 million.
In my experience of meeting with hundreds of wealthy folks every year for the last 15 years, there are some shared financial traits:
- They have shifted more toward optimizing their financial life over the fear of running out of money. (Unfortunately, that latter fear never totally goes away.)
- Typically, their non-retirement accounts are bigger than their retirement accounts. This is often for one of the following reasons: an inheritance, significant income during their working years, a business or asset sale.
- Taxes play an increasingly important role in their financial life, basically because of the two points above.
OK, so to answer the question this article started with: Should you delay claiming Social Security because you’re wealthy? In most cases, yes. Here’s why:

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. You don’t need the money.
Let’s start with fundamental need. If, as stated above, you have amassed significant non-retirement assets, you have liquidity and don’t necessarily need the money today.
Social Security will pay you handsomely for every month you delay beyond your full retirement age. These monthly increases add up to 8% per year, which is hard to match on a guaranteed basis.
2. You want to take advantage of the 'tax valley.'
Throughout your working years, you’re mostly summiting a tax peak. As your income increases, so too does your effective tax rate. Then comes retirement, and you can fall off a tax cliff and remain in a tax valley until you start to peak again. What causes that peak if you’re not working? Social Security income and required minimum distributions (RMDs) often have a significant impact on your tax rates.
Delaying Social Security until 70 can prolong the tax valley and may allow you to take advantage of those low rates. We are often helping clients recognize capital gains at lower rates and do Roth conversions in the period between retirement and 70.
3. You want to focus on legacy planning.
I would argue that since the SECURE Act of 2020, the Roth IRA has become the most tax-efficient way to leave a legacy to children. Life insurance agents would argue I’m wrong. They are conflicted. Like life insurance, Roth IRAs are left tax-free. Unlike life insurance, they maintain tax deferral typically for a period of 10 years beyond the decedent’s death.
Delaying Social Security allows you to convert traditional retirement accounts into Roth accounts while you’re in a lower tax bracket. Those accounts can then be invested aggressively if they are for legacy purposes.
In the early years of my career, we relied on a slew of different software and Excel spreadsheets to come up with a Social Security claiming strategy that made sense for our clients. The challenge is that the Social Security maximizers didn’t factor in goals or taxes. Now, the best planning software can pretty effectively tie all these things together and come up with an optimal solution. You can try a free version of our software.
Related Content
- Social Security COLA Increase for 2025 Could Be the Lowest in Four Years
- Social Security Optimization If You Save More Than $250,000
- Five Thoughts About the Election From a Financial Planner
- Three Reasons to Consider Roth Conversions in Your Peak Earnings Years
- What’s the Best Age to Buy Long-Term Care Insurance?
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification. I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? Wrong
The wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term Care
Many people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?
Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last Long
According to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond Investors
High-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance Agent
Your insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never Overlook
This estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
-
The Four D's That Could Force You to Sell Your Business
Business owners (or their heirs) can be rushed into a sale of their company if they haven't planned for a major change in circumstances — or the four D's.