Family situation: Do you have a spouse and/or children to factor into the equation? If so, additional healthcare or other expenses should be evaluated. If you have children, do you have any legacy goals?
Expenses: If you do not have a spouse or children and you expect your expenses to remain stable, locking in Social Security early may be appealing. If you anticipate higher costs later on (healthcare, inflation, etc.), which is prudent to assume, then delaying Social Security for a larger guaranteed income might make more sense.
Health and longevity expectations: If you have a family history of longevity and good health, then delaying Social Security provides more financial security in your later years since it is impossible to predict what might happen in the markets and, by extension, what to expect from your 401(k) investments. However, if you have health concerns that may limit your lifespan, then taking Social Security early could allow you to maximize benefits while you can fully enjoy them.
Insurance coverage and healthcare costs: Do you have long-term care insurance? If not, then preserving your 401(k) could be valuable for potential long-term care expenses. Medicare eligibility starts at 65, but it doesn’t typically cover long-term care. Furthermore, out-of-pocket healthcare costs may continue to rise in the future.
Investment risk and market volatility: If your 401(k) is heavily invested in stocks, then a market downturn could significantly impact your withdrawals. A more conservative portfolio might mitigate risk but could also limit growth.
Required minimum distributions (RMDs): At 73, you must begin taking RMDs from your 401(k), which could impact your taxable income. If you withdraw early, then you may reduce future RMDs, which can help with tax planning.
Other sources of cash: Do you have other sources of savings and/or investments, such as a savings account or brokerage account? If so, then these could supplement your income and specifically reduce the burden on your 401(k). However, be mindful of maintaining a sufficient emergency fund should unanticipated expenses arise.