Social Security helps millions of Americans make ends meet in retirement. That makes it surprising to see so many people make a basic mistake that can cost them thousands in benefits over the long run.
In the following segment from their video guide to investment planning, Motley Fool director of investment planning Dan Caplinger talks with Fool markets/IP bureau chief Mike Klesta about this crucial mistake. Dan notes that he sees too many people take their Social Security benefits at the earliest possible moment, taking reduced payments at age 62 rather than waiting longer to reap higher monthly benefits. Dan points out that in many cases, these retirees have other potential income sources to tap, including company pensions and retirement investing accounts like IRAs and 401(k)s. By using them more extensively, people could wait and increase what they get from Social Security. Yet Dan points out that it's hard for many to see the future impact of their Social Security choices, and so it's uncertain whether most people will stop making this mistake.
Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.