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My father is retired (age 66) and makes $35K between his pension and Social Security. He also has a traditional IRA with $60K that he is not currently withdrawing from. My mother is currently working (age 60) and makes $100K. She has a traditional IRA with $50K that she is not currently withdrawing from. They currently file taxes Married filing Jointly.

My mother plans to retire at 65. Her Social Security Benefits estimated at the time of retiring would be around $26K.

Assuming their IRAs remain roughly the same by the time of retirement, does it make sense to postpone claiming Social Security and instead withdraw from the IRA up to the top of the 12% tax limit at the time? If I understand correctly this would allow them to clear out their IRAs over the course of 2.5 years at 12% or less tax and gain the benefits of postponing Social Security.

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I would take a look at this web site. It will give you the optimal strategies on when to take social security and why they are optimal. There are similar paid services that might do better, but a forum that I visit frequently swears by the above site.

The key thing in this situation is expenses. With such little saved for retirement managing those expenses will be the key to success or working much past the desired retirement age.

To me it seems like they are living off of 135K per year (100k mom + 35K dad) and have saved very little. How are they going to live off of 61K in retirement? As scheduled the money they have saved will last about 2 years.

Does your mom have a 401K? If so she can greatly increase her retirement savings and is probably eligible to save 31K per year (19k 401K, 6K catch up, 6K IRA over 50). That will swell her IRA to about 250k with no growth. Even just doing an IRA she can add 30K in that time frame.

They really need to cut expenses, and save more. Perhaps dad should go back to work.

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  • I know (as in I met him IRL) the author of that site. The math there is a good start, but a bit simple. The interaction between converting funds to Roth now, even at 22%, vs having it impact taxation of SS benefits, isn't really discussed there. I'd highly recommend a spreadsheet to OP. i.e. that he play with one.
    – JTP - Apologise to Monica ♦
    Oct 30, 2019 at 18:24

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