Ask an Advisor: I Need $3500 Per Month to Cover My Expenses. Should I Take Social Security or Tap My 401(k)?

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Jeremy Suschak, CFP®

Mon, Mar 17, 2025, 5:00 AM 8 min read

Financial advisor and columnist Jeremy Suschak

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I'm retired and person a pension but I inactive request to supplement my monthly income. My choices are to assertion Social Security oregon commencement withdrawing wealth from my 401(k). I'm 64 and person $200,000 successful a 401(k). My Social Security estimates are astir $2,600 a month. I request $3,500 a period to wage bills. Your advice?

– Bob

The concern you look is communal among existent and soon-to-be retirees, but unfortunately, determination is nary one-size-fits-all approach. While I cannot screen each the factors you should yet consider, I'll code a fewer that volition hopefully assistance you marque advancement toward an eventual decision. I’ll besides outline immoderate of the tradeoffs betwixt taking Social Security aboriginal and drafting from your 401(k).

A financial advisor who offers status readying services tin assistance you reply this benignant of question. Connect with your advisor matches today.

The archetypal and astir evident measurement you should instrumentality is to cipher your income gap. Presumably, you person already done this. But to facilitate immoderate examples, let's presume your pension provides $1,500 per month, leaving a $2,000 spread for either Social Security oregon your 401(k) to bridge.

Now, let's look astatine the tradeoffs betwixt the 2 options you raised, assuming a $2,000 per period income shortfall.

At your existent property of 64, claiming the estimated $2,600 monthly payment would afloat screen your assumed income spread and adjacent permission a surplus of astir $600 per month. Again, this is simply a hypothetical based connected the presumption that your pension pays $1,500 per month.

The contiguous and evident payment of this enactment is that you bash not person to retreat from your 401(k), allowing that wealth to stay invested and perchance grow. However, taking Social Security astatine 64 locks successful a permanently reduced monthly benefit.

If you hold until afloat status property (FRA) astatine 67, your payment volition summation by astir 8% per twelvemonth until you scope property 70. You should usage the Social Security Administration's payment calculator to estimation what your payment would beryllium if you hold until your FRA oregon adjacent property 70 since that could further pass your decision.

Any other income generated by waiting to cod Social Security could marque a meaningful quality aboriginal successful retirement, peculiarly arsenic costs summation owed to ostentation and imaginable healthcare expenses arise. This would besides trim the aboriginal load connected your 401(k) savings erstwhile the clip comes to statesman drafting connected them.