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Should I begin collecting Social Security while still working to maximize my contributions to my 401(k) and Roth IRA accounts?

I will be turning 68 years old this January. I am currently employed and putting about $20,000 per year into my 401(k). This is the maximum that my current situation will allow. I plan on working to the age of 70. I am considering collecting my Social Security when I turn 68 (estimated $3100 per month) and using it to max out my 401(k) contributions ($24,500), put the maximum deposit into my Roth IRA, and the remainder into a savings account. Would this be a sensible option?

Banking, Financial Planning, Social Security, 401(k), IRAs
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October 2018

I love the idea of doing whatever it takes to save more in the last couple of years of retirement!  However, if you wait until age 70 to take Social Security, you get an 8% bump per year that you wait in the benefit.  That larger benefit lasts a lifetime.

Could you make more in your Roth and 401(k)?  Maybe, but 8% safely guaranteed is hard to beat.  If I were you, I'd wait until you stop work and let the lifetime benefit from Social Security grow.

Hope that helps!

October 2018