5 Mistakes In Social Security That Could Cost You A Fortune

Let’s discuss the five Social Security mistakes and how to avoid them.

Mistake 1: Not Checking Your Record Of Earnings

Even if you’re decades away from filing for Social Security, failing to keep track of your annual earnings could be a costly error. Because the amount of Social Security benefits you get is determined on your earnings record, if that record is incorrect, you may not receive the benefits to which you are entitled.

What To Do: Check your statement once a year to avoid losing money due to inaccuracies in your earnings record. If you find any inaccuracies, gather proof of your wages, such as your W-2 or pay stubs, to send to the Social Security Administration (SSA). Once the SSA verifies your claim, your record will be corrected.

Mistake 2: Failure To Work Long Enough

At least 40 labor credits are required to qualify for Social Security retirement benefits. You can earn about four credits annually based on your salary. To gain one credit in 2019, you must earn $1,360, or $5,440, to get the maximum of four credits.

What to do: Check your earnings statement as you near retirement to ensure you have enough credits to qualify for Social Security. Consider working for one or two more years to help raise your Social Security benefits if you haven’t met the year requirement.

Mistake 3: Committing Too Early To Social Security

When you reach age 62, you can file for Social Security payments. However, for those born after 1959, the cut for collecting benefits at age 62 is 30%. The lesser benefits are permanent: once you reach Full Retirement Age (FRA), your payments will not increase.

What to do: Consider delaying your Social Security claim a little longer. If you can wait until you reach Full Retirement Age (FRA), your benefits might increase by 8% per year until you reach age 70.

Mistake 4. Waiting Too Long To Claim Benefits.

If you’re in bad health, filing a claim sooner rather than later could result in more considerable benefits throughout your life. Furthermore, if you have cash flow issues, an infusion of monthly benefit checks would help you live better and clear your debts.

What to do: Don’t assume that waiting until you’re 70 is the best option for you. Instead, do your math or consult a financial counselor and consider your circumstances. 

Mistake 5: Failure To Coordinate Benefits With Your Spouse.

If you and your spouse are married and each look at your benefits separately, you may be losing out on techniques to optimize your joint retirement benefits.

What to do: When you collaborate with your spouse on your Social Security plan, you may ensure that your combined retirement benefits are maximized.

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