Markets Peaking: Should I Delay Retirement for an 8% Boost?

Wait, a built-in 8% raise for waiting?

Wait, an automatic 8% raise just for waiting? Yep. In 2025, Social Security’s delayed retirement credits still boost your benefit by about 8% per year for every year you wait past your full retirement age (FRA) until age 70. That’s not a promo rate. That’s written into the rules for folks born in 1943 or later. If your FRA is 67 (that’s most people retiring now), waiting to 70 stacks roughly a 24% higher monthly check, before any cost-of-living adjustments (COLAs). A built-in raise for patience.

Here’s why I start here. You can’t control the market. You can control when you claim Social Security. And in a year when people are typing “should-i-delay-retirement-if-markets-are-peaking” into search bars, it’s worth comparing a guaranteed 8% to the very not-guaranteed game of timing a portfolio around headlines. Market peaks come and go; that math doesn’t.

Let’s set the baseline clearly:

• SSA rule (2025): Delaying past FRA increases your benefit ~8% per year until 70; after 70, no more credits. Source: Social Security Administration delayed retirement credits for those born 1943+.
• Scale check: FRA 67 to 70 = about +24%. FRA 66 to 70 = about +32%.
• Context on early claiming: Claiming at 62 with an FRA of 67 cuts the monthly check to about 70% of the FRA amount, a 30% reduction. People forget the spread between 62 and 70 is huge.

Now, on the market side: peaks feel real in the moment, but they’re slippery. The S&P 500’s price return was roughly -19.4% in 2022, then rebounded around +24% in 2023. Same index, back-to-back. I bring that up because if you’re anchoring your retirement date to a “top,” you’re trying to predict something that professionals mess up all the time. I’ve sat in rooms where very smart people thought the top was in, twice, only to watch the tape keep grinding higher. Then reverse. Then rip again. You get the point.

So the trade-off you’ll learn how to weigh here is simple, not easy: a known raise versus uncertain timing. A known 8% per-year increase in a government check that lasts as long as you do, versus the very real possibility that markets pull back right after you claim, or rally right after you wait. Known raise vs. unknown timing. Same idea said twice on purpose.

What we’ll cover in this section of the guide:

1. How the 8% delayed credits actually apply to your benefit and your spouse’s options.
2. When delaying makes mathematical sense, and when it doesn’t (health, cash flow, taxes).
3. How to compare an 8% guaranteed boost to realistic portfolio return expectations, not dream returns, but the net you can count on after fees, taxes, and volatility.

Quick human note: I get the itch to “lock in” a high. I really do. But Social Security isn’t a trade; it’s insurance. In the pages ahead, we’ll keep it practical, numbers first, then the real-life stuff like paying the mortgage and sleeping at night. And if you spot a tiny typo here or there, that’s just me typing fast, not the math changing.

Are stocks peaking or just pausing? Think probabilities, not headlines

Are stocks peaking or just pausing? Think probabilities, not headlines. I don’t have a crystal ball on my desk, just a chipped BankPointe mug and a Bloomberg screen. U.S. large-cap indexes did set a string of new highs across 2024 and again earlier this year, mostly on the backs of mega-cap tech and AI infrastructure names. But, and this matters, record highs don’t predict the next 6-12 months. Peaks often precede… more peaks. That’s been true across plenty of cycles.

Two practical anchors for the here-and-now: (1) sequence risk if you’re about to start withdrawals, and (2) cash actually pays again, which you can use as a shock absorber.

Headline highs feel like “it must be late.” History says they’re just data points. Your withdrawal timing is the fragile part.

On the highs: The S&P 500 notched multiple fresh closing highs in 2024 and again in 2025, with concentration still heavy in the top 10 names. That concentration angle isn’t a moral judgment, it’s just portfolio math; leadership has been narrow. My take, just one person’s take, is that narrow leadership can persist longer than feels comfortable. And yes, it can unwind fast too. Both can be true.

What does history say about new highs? Several long-horizon studies show that average forward returns after an all-time high look a lot like average returns in general. In plain English: new highs haven’t been a reliable sell signal. For example, J.P. Morgan’s Guide to the Markets (2024 edition) showed that the S&P 500’s average 1-year return after hitting a new high was similar to the long-term average for 1-year periods. Same story from Vanguard’s work in 2018 on market peaks, the median returns 1, 3, and 5 years after highs were not meaningfully worse than “any time” returns. It’s not a trick; it’s just that markets trend over time and make lots of highs along the way.

• Translation: Record highs in 2024-2025 don’t, by themselves, say much about the next year. The base case is still a wide distribution.
• Implication: The real risk to a new retiree isn’t that “we hit a high,” it’s bad returns showing up right as you start drawing cash.

Sequence risk, where the math bites. Two retirees with the same average return can end up worlds apart if one gets hit with a drawdown early. Make the numbers simple: $1,000,000 portfolio, 4% withdrawal, inflation bumps the dollar withdrawal a bit each year. If the first three years are -15%, -5%, +2%, you’re selling more shares at lower prices and shrinking the base that participates in the recovery. Same average return over 20 years as someone who got +10%, +8%, +5% first? The early-loss retiree almost always ends up with less cushion. I’ve watched this in real client data from 2000-2002 and again 2007-2009; the pattern repeats.

Use rates to your advantage (finally). We’re not in the zero-rate 2010s anymore. As of mid-September 2025, 3-6 month U.S. T-bills are yielding roughly ~4.7%-5.1% (check your broker’s current quotes; they move). Many government money market funds are still around the high-4s. That’s real carry you can actually feel in a statement, not a rounding error.

1. Build a “spending runway”: Park 12-24 months of expected withdrawals in T-bills or a high-quality ultrashort fund. That lowers the odds you’re forced to sell equities after a drop.
2. Stagger maturities: A simple 3-6-9-12 month ladder can refill cash flows while you wait out equity noise. It’s not fancy; it works.
3. Rebalance rules: Pre-commit. If equities rip another 10-15% later this year, trim back to target. If they fall 10-20%, your cash/T-bill bucket buys risk assets on sale, if your plan says so.

But should you delay retirement “because markets are peaking”? I wouldn’t anchor on the word peaking. Anchor on withdrawal fragility. If you can (a) cover 1-2 years of spending with cashlike assets yielding ~5%, and (b) keep equity exposure sized to your personal drawdown tolerance, the exact month you start probably matters less than the headlines make it feel. That’s my honest read. And if this is getting too mathy, fair; the short version is: protect the first few years of withdrawals and let the rest of the portfolio breathe.

One last sanity check: If you’re nervous because 2024-2025 set records, that’s normal. But history doesn’t say “crash next.” It says “could be fine, could be bumpy.” Your edge isn’t prediction; it’s design, cash runway, rebalancing, and a spending rate that can flex a bit when the tape gets ugly.

Delay 6-24 months? Here’s the real math, not the myth

Delay 6-24 months? Here’s the real math, not the myth. “Maybe I should wait” only makes sense when you price it. You’re swapping bigger checks later and more savings (plus one fewer withdrawal year) against the risk markets run without you and the lifestyle you push off. So, napkin out. I’ve literally used a deli receipt for this.

Quantify the four buckets (use your numbers, not mine, but here’s the framework):

• 1) Social Security increase: Delayed Retirement Credits are 8% per year between Full Retirement Age and 70 (SSA rule; not a projection). That’s a guaranteed bump on your primary insurance amount. If you delay 12 months, a $3,000/month benefit turns into ~$3,240/month before COLAs. Early claiming cuts are permanent; waiting adds a permanent raise.
• 2) Extra contributions: Another year of maxing out tax-advantaged accounts matters. For reference, in 2024 the 401(k) deferral limit was $23,000 plus $7,500 catch-up for 50+; IRA limit $7,000 plus $1,000 catch-up (IRS). 2025 limits adjust but the idea is the same, getting ~$30k+ more into tax-deferred or Roth can move the needle, especially if your marginal tax rate today is high.
• 3) Portfolio growth (or not): If you work one more year and keep contributing, your balance compounds. If markets flatline or fall, the “growth” might be zero, fine, your contributions still showed up at lower prices. If markets rip higher, you benefit either way; the open question is whether you missed a year of retirement you actually wanted. That trade-off is personal, not just financial.
• 4) One less year (or two) of withdrawals: Taking a $120,000 annual draw for living costs? Delaying 12 months avoids that withdrawal and leaves that capital invested. Even at a conservative 4-5% expected return path, skipping a withdrawal early in retirement lowers sequence risk. That’s not academic; sequence math is brutal if the first two years go poorly.

Health coverage while you wait (the silent budget-buster):

• Under 65: The Inflation Reduction Act extended enhanced ACA subsidies through 2025, capping benchmark premiums at ~8.5% of household income for eligible buyers (CBO/IRS guidance). Cost-Sharing Reductions apply if income is roughly 100-250% of FPL. COBRA typically costs 102% of the full employer premium, translation: sticker shock. Model both.
• 65+: Medicare Part B has a standard premium and income-related surcharges (IRMAA). As a reference point, 2024 IRMAA brackets began at MAGI above $103,000 (single) / $206,000 (married filing jointly), with tiered monthly surcharges added to Part B and Part D (CMS). Your actual 2025 numbers depend on your 2023 MAGI because of the two-year lookback. Watch Roth conversions and big RSU vests, they can nudge you into a higher IRMAA tier.

Two quick scenarios (illustrative, round numbers on purpose):

Assumptions: Age 67, FRA 67, benefit today $3,000/mo; portfolio $1.2M in 60/40; spending need $120k/year; expected long-run portfolio return 5% nominal; cash/T-bills ~5% this year (we’ve actually seen ~5% yields much of 2024-2025); inflation 2.5%.
Scenario A (retire now): Claim SS now ($36,000/yr). Withdraw ~$84,000 from portfolio in year one. End-of-year portfolio ≈ $1.2M × 1.05 − $84k ≈ $1.176M.
Scenario B (delay 12 months): Work one more year, contribute $30k pre-tax, no withdrawals; portfolio ≈ ($1.2M + $30k) × 1.05 ≈ $1.291M. Next year, claim SS at ~$3,240/mo ($38,880/yr), so withdrawals drop to ~$81,120.

What’s the breakeven? For Social Security alone, a 12-month delay with an 8% higher check typically crosses even in the late 70s to early 80s depending on COLAs and discount rate. With the portfolio effects (extra contributions, one fewer withdrawal), breakeven creeps earlier. Using the rough assumptions above and discounting at 3-4%, I generally see breakeven around age ~79-81. Could it be 77 or 83? Yep, depends on your tax bracket, healthcare costs, and investment returns.

Now the messy parts people skip:

• Taxes: Another year of salary may let you do larger pre-tax contributions, but it can also push you into IRMAA two years from now. On the flip side, retiring now might create a low-income window for Roth conversions before RMDs kick in.
• Markets: If you delay and the S&P 500 is up, say, 12-18% over your delay window, you’ll feel FOMO. If it’s flat or down, you’ll feel smart. You can’t know. Lock in the design: cash runway, contribution plan, rebalancing rules.
• Lifestyle utility: A year of good health at 67 is not the same as a year at 77. There’s no spreadsheet cell for that, but it’s part of the decision.

Bottom line: Price the 4 buckets, price healthcare cleanly, and run the “retire now vs. delay 12 months” comparison. If the math says delay adds clear dollars and you’re not giving up life you actually want, waiting is rational. If the gain is marginal and the trip you’ve talked about for five years keeps getting bumped? Take the trip. I’ve never seen a Monte Carlo that modeled regret correctly.

Sequence-of-returns risk: protect the first 5-10 years of cash flow

Here’s the thing that trips people up: the average return over a 30-year retirement matters less than when those returns show up. If the bad years hit early, you’re pulling cash from a shrinking base and locking in losses. That’s sequence risk in a sentence. Wade Pfau’s research (2013) shows that the first 10 years of market returns explain roughly 80% of the variation in sustainable withdrawal rates across history. Translation: your early years do a lot of the heavy lifting. And we’ve seen how fast it can bite, 2022 served up a roughly −25% peak-to-trough drawdown in the S&P 500 and one of the worst bond years in decades (Bloomberg U.S. Aggregate down about −13% in 2022). You don’t need to predict that. You just need to not sell into it.

Build a cash-flow runway

• Target 2-3 years of baseline withdrawals in cash or short-duration Treasuries. If your baseline is $120k, that’s $240k-$360k parked in T-bills, money markets, or a short-duration bond fund.
• Refill annually. In up years, refill from equities during rebalancing. In flat/down years, skip the equity refill and let the runway do its job. Refill later when markets recover.
• As of September 2025, short-term Treasuries are still yielding in the mid-4% range, so your “dry powder” isn’t dead money. It’s a paid waiting room.

Bucket or guardrails, pick a rule you’ll actually follow

• Bucket framework: Bucket 1 (1-3 years cash/short bonds) = spending runway. Bucket 2 (3-7 years high-quality bonds) = ballast. Bucket 3 (7+ years stocks) = growth. You harvest gains from Bucket 3 to refill 1 and 2 after strong years. If stocks are down, you live off Buckets 1 and 2 and wait.
• Guardrails (Guyton-Klinger, 2006): Start with a reasonable rate, say, 4.0% of your portfolio, set guardrails at ±20% around that dollar amount, and adjust by ~10% when breached. Two simple rules from their paper: skip inflation raises after a negative year, and cut a bit if the withdrawal % drifts too high. Their 2006 study showed this kept failure rates low while allowing pay increases when returns cooperated.

Dynamic withdrawals, start a touch lower, give yourself raises

I know, nobody likes starting lower. But a 3.6%-3.9% starting draw with a built-in raise when your equity sleeve is up, say, 10%+ in a year is a small trade-off for a big safety margin. It’s like giving yourself a performance bonus rather than a fixed salary. Same idea, slightly different angle: you de-risk the fragile early years and still participate when markets are friendly.

Real-world rhythm (and yes, this is how I’d run it)

1. Hold 2-3 years of spend in T-bills/short bonds. That’s your runway.
2. Each January, check allocations. If equities are above target, peel gains to refill the runway. If not, don’t touch them. Wait.
3. Apply a guardrails rule: no inflation raise after a down year; trim 10% if your withdrawal rate drifts above the upper band; give yourself a 10% raise if you breach the lower band on the good side.

Sequence risk isn’t about predicting peaks. It’s about refusing to sell good assets at bad prices.

One more candid note because people get anxious here: the S&P 500 made new highs earlier this year and it’s been a bit choppy since. Could we see a downdraft after a peak? Sure. We always could. Your antidote isn’t clairvoyance, it’s a 2-3 year runway, a rule for refills, and a guardrail that nudges spending up or down. Same idea said differently: protect the first 5-10 years of cash flows and you can retire on-time without playing hero with market timing.

Tax moves in 2025 that can tip the scale

Taxes often make the difference between “wait a year” and “you’re fine to go.” With SECURE 2.0 (enacted in 2022), Required Minimum Distributions (RMDs) start at age 73 as of 2023, and they move to 75 starting in 2033. That shift buys many people in their early-to-mid 60s a runway: lower earned income, no RMDs yet, and room to reshape lifetime taxes. If markets feel peaky and you’re considering a delay, the tax window might be the real reason, not the chart on CNBC.

Your 60s can be prime time for Roth conversions. Retire (or semi-retire) and your W-2 drops; before Social Security and RMDs kick in, your Adjusted Gross Income (AGI) may sit comfortably in a middle bracket. Converting pre-tax IRA dollars into a Roth in 2025 while keeping AGI within a targeted bracket can trim future RMDs and give you tax-free optionality later. One practical wrinkle I like: bridge living expenses with taxable cash or maturing CDs/short Treasuries so you don’t have to sell more IRA assets to pay the tax on the conversion. In simple terms, use cash to pay the tax, keep the conversion clean.

Harvesting capital gains can also make sense in low-income years. The U.S. has a 0% long-term capital gains/qualified dividend bracket at lower taxable incomes. To put numbers on it: for 2024, the 0% bracket ran up to $47,025 of taxable income for Single filers and $94,050 for Married Filing Jointly (IRS Rev. Proc. 2023-34). 2025 thresholds are inflation-adjusted, check the current IRS table for your filing status, but the idea stands. If your income is temporarily light because you paused work, you can realize gains, reset basis, and potentially pay 0% federal on those gains. Just mind the interaction with other items on your return (NIIT, credits, state tax, etc.).

Two watch-outs that bite people:

• Medicare IRMAA. Medicare uses a two-year lookback on MAGI. Your 2025 Part B and D premiums are based on your 2023 MAGI. So a chunky 2025 Roth conversion can spike your 2027 premiums. In 2024, the first IRMAA bracket started at $103,000 MAGI for Single and $206,000 for MFJ (CMS data), with monthly Part B surcharges stepping up across tiers. Numbers reset each year, but the point is the same, cross a line, pay more, sometimes by hundreds per person per month. Plan conversions in slices, especially around late-year surprises.
• Social Security timing. Claiming earlier increases taxable income sooner (up to 85% of benefits can be taxable once provisional income passes $34,000 Single / $44,000 MFJ, those thresholds have been unchanged since the 1980s), which can shrink your Roth window. Sometimes it’s cleaner to delay benefits and convert more while brackets are known.

Quick reality check on markets since people tie this to timing: equities hit new highs earlier this year and have been choppy, and yields are still elevated versus a few years ago. That combo means tax decisions carry extra weight, bond income is decent, equity gains are real, and bracket management matters. I’ve told clients for years: you don’t need perfect forecasts, you need a plan for brackets and premiums.

More conversationally, if you’re 62 to 69 and sitting on a big pre-tax IRA, I’d sketch a 3-5 year map. Something like: 2025-2027 partial Roth conversions up to the top of your chosen bracket, harvest some LTCGs in any year you can stay in (or near) the 0% zone, delay Social Security until those conversions are mostly done, and keep a big red circle around IRMAA tiers. And yeah, I’m going from memory here but I believe the 0% capital gains line moved up a bit again for 2025; the IRS inflation tables came out late last year, just double-check before you press the sell button.

In low-income years, convert or harvest; in high-income years, defer. The tax tail shouldn’t wag the plan, but it can add 1-2 percentage points to your after-tax outcome across a decade.

Action list for 2025:

1. Estimate 2025 AGI now; model a Roth conversion that keeps you below your chosen bracket cap (and state cliffs).
2. Check the current 2025 long-term capital gains thresholds; tax-gain harvest if you can stay in the 0% bucket.
3. Run a two-year IRMAA lookback map: any 2025 moves affect 2027 Medicare premiums, pace conversions.
4. Sequence Social Security relative to conversions; use taxable cash to fund spending and taxes to keep IRA withdrawals controlled.

When waiting makes sense, and when it doesn’t

No heroics. If your plan works both ways, retire now or delay, you’re already ahead. If waiting is the only way the math holds together, that’s a signal too. Ask yourself: would an extra year move the needle? If yes, how? If no, why are you grinding?

When waiting usually helps

• You can add meaningful savings. One more year of maxing 401(k)/HSA, plus employer match, can be real money. For 2025, the 401(k) employee limit is $23,000 with a $7,500 catch-up for 50+ (per IRS 2025 limits), so a household can sock away north of $60k with matches. Compounded at around 7% long-term equity returns (historical average-ish), that adds resilience.
• You’re near a benefit jump. Social Security credits increase about 8% per year from Full Retirement Age to 70 (SSA), and some pensions step up 5-10% at service or age milestones. If you’re six months from a big bump, don’t be cute, wait.
• Your cash runway is thin. If you don’t have 2-3 years of spending in safe buckets (cash/short Treasuries), an ugly first-year market drop can sting. We all remember 2022. A thicker buffer reduces sequence risk when stocks wobble.

When retiring now can be fine

• You’ve funded a runway. Two to three years of expenses in cash and short-duration bonds isolates you from near-term drawdowns.
• Your withdrawal rate is ~4% or less with buffers. The Trinity Study (1998; updated 2011) showed roughly 95% success for a 30-year 4% withdrawal on a 50/50 portfolio. Not a guarantee, valuation matters, but with flexible spending and some tax planning, it’s workable.
• Work is the real drag. If the job is the problem (been there) and the math already clears, time is the scarce resource. You don’t need to “win” more, just avoid unforced errors.

Hybrid path that keeps optionality

• Semi-retire. Part-time or consulting income, even $20-40k, can lower your portfolio withdrawals below 3%, which is powerful during high-valuation stretches.
• Delay Social Security. Bridge with taxable cash or part-time income, let the benefit grow ~8%/yr to 70, then lock in higher inflation-adjusted income.
• Keep investing. Maintain equity exposure with a rules-based glidepath. You’re not “all-out” if stocks sell off; you can rebalance instead of guessing tops.

About the “are markets peaking?” worry

Short answer: nobody knows. As of September 2025, the S&P 500 is off summer highs after a choppy August, the 10-year Treasury is hovering near ~4.2%, and Shiller CAPE sat around 32 earlier this year (Robert Shiller data, mid-2025), elevated versus history. High valuations raise sequence risk, yes, but peaks are visible only in the rearview. Retiring solely because you fear a peak is as dicey as working extra years chasing a melt-up. I said this back in May, and it still holds.

A quick gut-check I use

1. If markets fell 20% next month, could you hold your allocation, spend from your cash bucket, and sleep? If no, a short delay to bulk the runway helps.
2. Do you have at least one flexible lever, part-time income, spending trim of 5-10%, or tax moves (like Roth conversions), to offset a bad first two years? If yes, the start date matters less.
3. Is waiting the only way your plan works? That’s not a timing issue; that’s a savings/spending mismatch. Fix the structure, not the calendar.

Retire when the plan is robust to both outcomes. If it only works after one more bull run, you don’t have a plan, you have a hope trade.

And one small mea culpa: I keep saying I’d share my personal glidepath rules; I haven’t yet. Short version: 2-3 years cash, 5-7 years short/intermediate bonds, equities for the rest; rebalance bands at 5%. Boring beats brave.

Okay, what should I do this week?

No forecasts. Just the blocking and tackling you can actually finish by Sunday night. Markets are still jumpy this year, big-cap tech strong, small caps meh, rates not exactly cheap, so we’re going to build decisions that don’t care what October throws at you.

• Build a 10-year cash-flow map. One row per year, next 10. Three columns: (1) core expenses (after trimming the fluff), (2) guaranteed income (pensions, annuities, Social Security by start age), (3) withdrawal need = expenses minus guaranteed. Keep healthcare explicit: pre-Medicare premiums + out-of-pocket. If you’re pre-65, assume ACA premiums and show the subsidy cliff. Remember IRMAA looks back two years, so 2027 Medicare means 2025 MAGI matters.
• Price two cases in your planner: retire now vs. delay 12 months. Include Social Security timing and healthcare. Quick anchor: for someone with FRA 67, Social Security at 62 pays ~70% of PIA, at 70 pays 124% of PIA. That’s about a 77% higher check at 70 than 62 (SSA rules). Put those side by side so you can see cash need shrink when SS starts later, sometimes the delay flips the risk math.
• Set your runway: 2-3 years of planned withdrawals in cash and short-term Treasuries/ultra-short bonds. Two tweaks I use personally: (a) stay under FDIC/NCUA limits ($250k per depositor, per bank), and (b) ladder 3-12 month T-Bills for the next four quarters. Rules-based refill: Replenish the next year’s spending every January from interest/dividends first, then from equities only if the prior calendar year total return exceeded, say, +8%. If not, refill from your bond sleeve. It’s boring. It works.
• Outline 2025 tax moves (do this now, not on Dec 27):
  • Roth conversions: target brackets that keep 2027 Medicare IRMAA in check (again, two-year lookback). For reference, last year’s (2024) first IRMAA threshold started at MAGI of $103,000 single / $206,000 married. We don’t want to blunder over that unless it’s worth it.
  • Capital gain harvesting: the 0% long-term capital gains bracket in 2024 was up to $47,025 (single) and $94,050 (MFJ) taxable income. If your 2025 taxable income lands near that range after deductions, harvest gains to step-up basis while staying in 0%.
  • RMD planning: Age 73 under SECURE 2.0. If you’re nearing it, partial Roth conversions this year can soften future brackets.
• Decide a trigger, not a date. Write it like a checklist: “I retire when (a) 24 months of withdrawals are funded, (b) my forward withdrawal rate ≤ 3.8% based on the 10-year map, and (c) SS start at 68 is locked.” Pick your numbers. Then stop arguing with the calendar.

Two human notes. First, yes, I’m oversimplifying, healthcare before 65 can swing wildly, so grab real quotes, not averages. Second, if a 20% drawdown next quarter would force you to sell stocks to fund groceries, that’s the plan telling you to add runway. Since 1926, bear markets (−20% or worse) have shown up every few years; you don’t need the exact stat to respect the risk. Build a map that works either way.

Oh, and if you want a sanity check: run both cases, then ask a very boring question, “Could I live with either for two years without changing my mind every time the S&P gaps 1% at the open?” If yes, you’re close. If no, add one year of cash and re-test. I had to do that myself in 2022 after a sloppy refill rule. Lesson learned.

Frequently Asked Questions

Q: Is it better to delay Social Security to 70 if markets feel like they’re peaking?

A: Usually, yes, if you can cover expenses without stressing your portfolio. Delayed retirement credits add about 8% per year past your full retirement age until 70 (for those born 1943+). That’s a contractual increase, not market-dependent. Compare that to trying to time a “top,” which even pros bungle. If you’ve got cash or part-time income to bridge the gap, delaying often improves lifetime income and sequence-of-returns resilience.

Q: How do I set up a retirement-income plan if I’m 67 and worried about a market peak?

A: Build a bridge and reduce the need to sell stocks at bad prices. Practical steps: 1) Fund 2-3 years of core expenses (after pensions) in cash/short-term Treasuries. 2) Delay Social Security toward 70 to lock in ~24% higher checks vs FRA 67; that raises your “floor” income. 3) Use the gap years for Roth conversions up to your target tax bracket, watch Medicare IRMAA brackets. 4) Set a withdrawal “guardrail” (e.g., 4% initial, pause raises if portfolio drops 20%). 5) Rebalance annually; sell what’s up, buy what’s down, don’t let fear drive allocation. 6) Keep equities you’ll need 7-10+ years out, bonds/short T-bills for near-term spending. That way, whether the S&P pops or drops next quarter, your bills get paid without panic selling. I’ve sat in rooms where folks called the top perfectly, until the market added another 12% first. The structure beats the guess.

Q: What’s the difference between delaying Social Security and just holding more bonds for safety?

A: Delaying Social Security increases a guaranteed, inflation-adjusted income stream (benefit grows ~8%/yr to 70, plus future COLAs). That’s longevity insurance, you can’t outlive it. More bonds lower portfolio volatility but don’t raise guaranteed income. If your risk is running out of money at 88, a higher Social Security check is usually more powerful than simply shifting 10-20% more into bonds. Often the best mix: delay SS, keep a sane bond ladder, and rebalance.

Q: Should I worry about missing the top, what if stocks tank right after I retire?

A: Worry less, prepare more. Sequence risk is real, but a 2-3 year cash/T-bill bucket plus delaying Social Security means you’re not selling stocks into the hole. Historically, markets bounce around, 2022 was ugly, 2023 rebounded. Your job is cash-flow math, not headline timing. If the market drops, spend the cash bucket, rebalance from bonds, and give equities time to recover. That’s the whole playbook.

@article{markets-peaking-should-i-delay-retirement-for-an-8-boost,
    title   = {Markets Peaking: Should I Delay Retirement for an 8% Boost?},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/delay-retirement-at-market-peak/}
}