If your tax rate is fixed and 85% of SS will be taxable, then it is irrelevant; it just changes the value of a dollar. If you are in the 22% tax bracket, then $10,000 in your traditional IRA, $7800 in your Roth IRA, and $9595 in SS should be considered to be equal dollars as you can spend $7800 of any of them.What about taxation of SS benefits vs portfolio withdrawal amount? Does the fact that currently at least 15% of SS benefits are not taxed versus what a withdrawal from one's portfolio would be taxed matter in one's analysis?
If you may be in the SS phase-in, this is a slight advantage for delaying, as having a larger SS benefit and less non-SS income increases the fraction of your SS that is not taxed. This is the same type of benefit as making sure that you use up the lower tax brackets; if you are in the 12% tax bracket this year and will be in the 22% bracket next year, you should shift income to this year if possible, such as making a Roth conversion this year and withdrawing from the Roth next year. (Working the other way is that the phase-in is not indexed to inflation; if you have the same inflation-adjusted income every year, you might be near the top of the SS phase-in if you claim at 62, but pay tax on 85% of your SS benefit starting at age 63 whether you claimed at 62 or 63.)
Statistics: Posted by grabiner — Fri Nov 14, 2025 10:48 pm — Replies 9 — Views 1216