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The Biggest Social Security Mistakes to Avoid

7 minute read

David Ning

By David Ning

We all know that Social Security benefits will be available once we retire. However, many Americans miss out on a significant portion of their retirement benefits by making certain Social Security mistakes. You see, there are a few different ways you can claim your benefits. If you’re not fully aware of all your choices, the consequences could be huge. The average Social Security benefit in 2021 is estimated to be $1,543 a month. For a retired couple, we’re potentially talking about $3,000 a month in benefits. That’s a decent chunk of change. Do you really want to screw it up? Here are some of the biggest Social Security mistakes you should avoid when you are ready to claim your benefits.

Starting Your Benefits at Age 62

About a third of Americans claim their Social Security benefits as soon as they are eligible at age 62. We know it’s tempting, but claiming your benefits before you reach your full retirement age (between ages 66 and 67, depending on when you were born) will see the amount permanently reduced. Claiming your benefits right after your 62nd birthday will cause a roughly 25% reduction in your monthly benefits.

Basically, the longer you wait to claim Social Security, the higher those benefits will be. Of course, you’ll receive full benefits if you claim them at full retirement age. If you wait, you’ll receive even more. Your benefits will rise an additional 8% per year between your full retirement age and age 70. After that, though, there’s no reason to delay. Once you hit 70, your benefits will be capped out and no longer increase. If you’re able to, hold off on taking your Social Security as long as possible (within reason).

Missing Out on Spousal Benefits

Many people don’t realize they are able to coordinate their benefits with those of their spouse. Doing this can help to maximize those monthly checks. For example, if you earned less than your spouse over the years, you could have your spouse file for benefits and then suspend them. That would allow you to collect the 50% spousal benefit, in addition to your own benefits. Meanwhile, your spouse’s benefit accumulates the delayed retirement credits.

There are many strategies that spouses can utilize in order to get the most out of Social Security. If this all sounds a bit complicated to you, then consider contacting a local financial advisor. They can help you out with preparing a strategy that will be the most beneficial to you. It may cost you a bit of money to gain their advice, but it will be more than worth it.

Ignoring Social Security in Your Financial Plan

It seems like there is constant worry about Social Security. We hear it all the time, that it’s not adequately funded or on the verge of collapsing. So a lot of people simply ignore their Social Security payments in their retirement plans. Why count on something that might not be there, right?

While there’s something to be said for planning for the worst case scenario, you really don’t need to. The chances that Congress would let the entire Social Security program fall apart is slim to none. Additionally, the consequences of ignoring an inflation-protected guaranteed income stream is costly. We’re talking about years of work and savings. You’d need to save a lot more extra money to make up for ignoring Social Security.

Our advice? Go ahead and plan for a conservative Social Security amount into your retirement strategy. Hopefully, you’ll end up getting more than that, which will feel like a bonus. However, you’d be doing yourself a huge disservice by ignoring the benefit completely.

Not Signing Up for an Online Social Security Account

Did you know that you can get a free account at It will allow you to access everything related to your Social Security. Aside from saving the environment by not having paper statements mailed to you every year, it’s incredible convenient. You can also check your earnings history and play around with the different scenarios related to claiming your benefits at various ages.

Once you’re logged in, make sure all the information that the Social Security department has on you is correct. Obviously, ensure that your address, banking, or other personal information are right. You should also pay close attention to your earnings history. The department ultimately uses that number to calculate your benefit. If you notice any mistakes or discrepancies, you’ll want to sort them out sooner, rather than later.

Forgetting to Sign Up for Medicare

This is not strictly Social Security related. However, I’m including it because claiming Medicare benefits goes hand-in-hand with claiming Social Security benefits. Most people are eligible for Medicare Part B when they turn 65. Those who fail to apply when they are eligible are going to be penalized forever, if they ever need to be in the program.

Normally, those who claim Social Security benefits at age 65 will automatically be enrolled into Medicare. However, retirement ages are changing all the time — some people retire early and others delay their benefits. Regardless of what you choose to do with your Social Security, don’t neglect to plan a Medicare strategy too. The cost of healthcare is a big one — especially as you age.

Not Planning for a Death of One Spouse

Yes, a surviving spouse will get 100% of the deceased’s benefit. However, this benefit can replace the surviving spouse’s own Social Security check. The Social Security office will pay the surviving spouse the higher of the two benefits, but not both. This means that for many couples, one spouse dying also means having to live with a pay cut.

We understand that no one wants to think about a loved one passing away. However, the financial realities of it cannot be taken lightly. Your retirement budget might still include property taxes or even (gulp) the remnants of a mortgage. If you were counting on the combined Social Security benefits of both partners to cover those costs, you need to plan ahead. How will those bills get paid if you (or your spouse) pass away?

Deciding on Your Social Security Strategy Before You Run the Numbers

With two spouses having potentially different birth years, different earning history, and many different tax situations, there isn’t a single Social Security strategy that’s best for everyone. Most people unfortunately make the decision to receive their benefits without thinking about what’s best for them in the long run. Don’t make this mistake. Start thinking about it long before you retire. For example, I’m still in my 40s, but I already have a plan related to Social Security for my wife and I. My friends, who are similarly aged, also have already started to plan twenty years in advance.

There’s really no one-size-fits-all solution here. However, there are definitely some strategies that are better than others. Although we can’t provide you with specific advice without knowing your personal situation, we can tell you that it pays to be prepared. Run the numbers on your own Social Security, along with any other retirement savings and your planned retirement date. You may discover that you can actually wait until you’re 70 to claim Social Security. Or you may realize you’ll desperately need it at age 62, and have no choice but to claim it early. Either way, do some math ahead of time. Then make the best decision you can for yourself.

Forgetting to Claim Benefits All Together

You might think that no one could possibly forget to claim their Social Security benefits. However, I was just helping an older gentlemen (in his 80s) figure out how to begin receiving his Social Security check. For over a decade, he simply forgot to claim his benefits! He obviously hasn’t needed them to survive. But the money he’s lost out on is in the six figures! While he was okay without it, he’s not exactly loaded either. It’s safe to say that the money could have really helped over the years.

The latest you can delay your benefits is to when you turn 70. You won’t increase our payments any further after this. The Social Security office will pay retroactive benefits up to six months, but no more. That means that if you don’t claim your benefits by the time you turn 70 and a half, then you are giving the government a free gift. Some people (wrongly) assume that their Social Security contributions over the years weren’t enough to make a big difference. But wouldn’t even a small amount of money every month be better than nothing at all?

Ignoring the Earnings Limit

It may seem like a savvy strategy to claim your benefits before you reach full retirement age, as long as you’re still working full time (or even part time). However, your benefits will be reduced if you earn more than $18,950 per year (as of 2021). Even if you wait to claim until you reach your full retirement age, you will still see a reduction in benefits if your earnings are above $50,520.

Plenty of soon-to-be-retired folks like to attempt this “double-dip” strategy of continuing to work, while also collecting Social Security. You have to be careful though. Earning too much money from your job could have a negative impact on your Social Security amounts. However, once you have attained your full retirement age, there is no limit to your earnings.

Retiring Without Working for 35 Years

Although you are eligible for Social Security as long as you have worked at least 10 years, the metric used is based upon an average of your 35 top earning years. If you haven’t worked a full 35 years, then every year without earnings is counted as 0. This significantly lowers your average earnings as you can imagine. If you had to take extended time away from the workforce for whatever reason, make sure you keep this in mind as you near retirement age.

If you don’t have at least 35 years of work history, it’s a good idea to keep working for at least a few more years. This will help your account show as few annual zeros as possible. This will bump up your Social Security payments, at least a little bit. Even working part-time could really boost your check when you do become eligible to receive it.

The Bottom Line

Relax. Social Security isn’t going anywhere. This means that you’ve already saved a good deal of money for your retirement simple by working all those years. If you make the right moves, you could be getting a sizable monthly check for years to come. On the other hand, not taking the time to maximize your benefits can severely hamper your retirement budget.

For something that’s as important as guaranteed monthly (inflation-protected) income for the rest of your life, it pays to spend some time figuring out the best withdrawal strategy. Wouldn’t you agree? You don’t want to just wing it when you hit 65, trust me! Take the time to make an online account with the SSA, speak to a financial planner, and do some ol’ fashion number crunching. A little planning will make your retirement much easier!

social security mistakesShutterstock
David Ning

Experienced Finance Writer

David is a published author, entrepreneur and a proud dad. He firmly believes that anyone can build a solid financial foundation as long as they are willing to learn. He runs, where he discusses every day money issues to encourage the masses to think about their finances more often.


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