3 Common Social Security Mistakes (And How to Avoid Them)

When you imagine an ideal retirement, how is it funded? Whether you are married or divorced, there are many benefits you are entitled to receive upon retirement. With so many ways to claim said benefits, regardless of marital status, you must ensure you are doing your due diligence to avoid costly Social Security mistakes that could cost your retirement.

Retirement could be just around the corner or decades away. However far you are from retiring, it’s crucial to keep track of your annual earnings as early as possible. In doing so, you can avoid mistakes associated with an incorrect earning record. These may occur for several reasons, from employer reporting errors to name changes. A quick glance at your annual statement can make a world of difference in correcting errors. If you happen to catch a mistake, fixing it is as simple as gathering proof of earnings, like paystubs or a W-2, and submitting it to the Social Security Administration. Their verification is all it takes to correct your earnings record before it becomes a big problem throughout retirement.

Social Security retirement benefits work off a minimum of 40 work credits to qualify. Each work year will accrue up to four credits depending on your earnings. The determination of future benefits is based on the 35 highest-earning years of work. Individuals with fewer than 35 years of employment will experience an average of $0 for each year they didn’t earn. By retiring early or not working long enough, you may miss out on crucial retirement funds from Social Security benefits. By understanding this requirement early on, you can prevent a plethora of miscalculations in the future.

Ensuring you have gained enough credits to retire with full benefits will do more in the long run, even if that means working an extra year or two. Keep tabs on your earnings statement, determine whether or not you need to remain in the workforce for a few more years, and your efforts will go to great lengths to ensure you qualify for total Social Security benefits. Once you are in retirement, enjoying the fruits of your labor alongside a boost in monthly benefits, you will be glad you took the time to manage your retirement.

Waiting too long to claim your Social Security benefits is yet another costly mistake you should work to avoid. Although it is true that monthly benefits increase for every month you put off retirement, that doesn’t make putting off retirement the ideal solution. Depending on your average life expectancy, there isn’t much of an advantage to claiming early as well as claiming late. However, considering the health status of the citizens in our current climate, fewer people are living to the average age. If you are experiencing health issues, claiming late can lead to cash flow issues, higher amounts of debt, and more.

Before claiming your benefits, don’t simply assume that 70, or some other specific age, is all it takes to retire. Set up an appointment with a financial advisor to run the numbers and then determine the retirement age that fits your situation. For example, if your life expectancy doesn’t go much beyond 75, you are poised to receive the total benefits by claiming them early on.

Another common mistake surrounding Social Security benefits involves the assumption that this type of income is capable of fully funding your retirement living expenses. In some instances, surviving off your Social Security income alone may be possible, but it would require living well below your means. For most retirees, though, planning to live on Social Security alone puts the dream of enjoying their golden years at financial risk. Instead, plan to use Social Security as a supplementary income in addition to other forms of retirement income, such as an IRA, 401(k), passive income, or other nest egg.

Contact Information:
Email: Betty@PSREducators.com
Phone: 8889193252

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