He Expects to Retire With Less Than $250,000, Nowhere Near the $1.2 Million Target. His Social Security Timing Matters More Than Ever.

A recent Schroders survey put a number on what workplace retirement-plan participants think a comfortable retirement takes: approximately $1.2 million. Only 30% believe they will reach $1 million. More than half expect to retire with less than $500,000, including 24% who expect less than $250,000.

He is one of them. At 61, he expects to enter retirement with roughly $225,000 in his 401(k), nowhere near the $1.2 million benchmark. Looking at that gap, he assumes Social Security timing is beside the point. How much can one claiming decision matter when the savings shortfall is nearly $1 million? More than he thinks. The less he has saved, the more work Social Security must do, making its starting amount more important, not less.

Why the Savings Gap Raises the Stakes

A household with a large portfolio can absorb a smaller Social Security check. For someone entering retirement with less than $250,000, the benefit may cover housing, utilities, food, and insurance long after the savings account has thinned out.

The Schroders survey makes that pressure clear. Fifty-one percent of plan participants expect to retire with less than $500,000, while 33% reported carrying more credit-card debt than retirement savings. Another 69% said rising healthcare, utility, insurance, and housing costs have put retirement out of reach for their generation. When Social Security must carry more of the household, its starting amount matters enormously.

The Claiming Lever Still Available

A worker with a full retirement (FRA) age of 67 can begin collecting at 62, but doing so reduces the monthly benefit by approximately 30%. Waiting beyond full retirement age adds delayed retirement credits of about 8% per year until 70. Suppose his benefit at 67 would be $2,000 a month. Filing at 62 reduces it to roughly $1,400. Waiting until 70 raises it to approximately $2,480 before accounting for cost-of-living adjustments (COLAs). That creates a difference of about $1,080 a month, or nearly $13,000 a year, between the earliest and latest claiming ages.

The larger check is not free. Waiting means giving up years of earlier payments, so health, longevity, and immediate income needs belong in the calculation. But someone expecting a long retirement should not dismiss the difference because the 401(k) balance looks disappointing.

Social Security also receives annual COLAs. The 2026 bump was 2.8%. Those increases continue for life, adding inflation protection that a finite savings account does not provide. For married couples, the higher earner’s decision carries another consequence. Delayed retirement credits can raise the survivor benefit eventually left to a widow or widower, while claiming early can limit it. One filing decision may shape two retirements.

Using Savings as a Bridge

A modest portfolio does not have to finance 30 years by itself to be useful. Part of it may be able to fund a one- or two-year bridge that postpones Social Security and purchases a larger monthly benefit. That does not mean draining a small 401(k) automatically wins. Someone in poor health, carrying expensive debt, or lacking enough money for essential expenses may need to claim earlier. The purpose of the bridge calculation is to compare two real costs: spending some savings now or accepting a smaller lifetime check.

Even part-time work can change the equation. A paycheck covering part of the budget for another year may preserve savings and postpone the claim without requiring the household to reach age 70.

What to Do Before Filing

• Start with the Social Security statement. Compare the monthly and annual benefits available at 62, full retirement age, and 70. That shows what each additional year of waiting buys.
• Next, price the bridge. Calculate how much income savings or part-time work would need to provide during the delay, while keeping an emergency reserve intact. The question is not whether the portfolio can fund an entire retirement. It is whether a manageable portion can bankroll a larger Social Security check for life.
• For married couples, run the higher earner’s numbers first. That benefit may eventually become the survivor’s only Social Security check, giving the claiming date consequences that can outlive the original recipient.

Coming up short of $1.2 million makes this calculation more important. The smaller the savings pile, the more work Social Security must do, and the more valuable its starting amount becomes.

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