FWIW My DS was a later reader than many. Our schools don't do reading levels (well they do, but they don't give out that info to parents so I'm in the dark). I will say that DS wasn't reading in K and barely reading in grade 1 and then average in grade 2 (based on teacher's comments and my own observations). In grade 3 his reading completely took off and he's reading constantly now going into 4.
His teachers up until grade 2 were stressed. His writing has also been an issue and he now has a formal written expression LD diagnosis.
Our schools basically never hold kids back so we were never given that option. It would have been a complete disaster in our case since he's now reading above grade level and I don't think any amount of delay would help with his writing. Of course YMMV. Listen to what they have to say, remediate what you can and follow your gut. Best of luck!
