3 Social Security Mistakes That Cost Retirees Thousands Every Year
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If you've ever learned something and thought, "I wish someone had told me this sooner," you're familiar with how a lot of retirees feel.
Social Security isn't complicated on purpose, but it's easy to make small decisions that snowball into years of lower income.
Here are the mistakes that cost people the most.
1. Claiming too early
It's tempting to file as soon as you turn 62. It feels like finally tapping into something you've paid into your whole life. The problem is that early filing permanently cuts your benefit by as much as 30%.
Waiting until your full retirement age gives you the amount you actually earned. Waiting until 70 increases it even more. That difference adds up to thousands of dollars over the average retirement.
How to avoid it: Estimate your benefit at different filing ages. If you can delay even part of your claim, those extra dollars compound for the rest of your life.
2. Not understanding how working affects your benefit
If you file before full retirement age and keep working, Social Security can temporarily withhold part of your benefit if your earnings exceed the annual limit. It doesn't mean the money is gone forever, but it does create surprises for people who weren't expecting smaller checks.
Many retirees don't realize this rule exists until it hits their bank account.
How to avoid it: If you plan to work while collecting, check the current earnings limit so you know exactly how your benefit will be adjusted. And if you are earning extra income, be sure to park it in a high-yield savings account, earning more than 10x the national average.
3. Missing out on spousal or survivor benefits
Spousal benefits can give you up to 50% of your partner's full benefit. Survivor benefits can replace your partner's full benefit if they pass away. Too many people either don't know these exist or assume they don't qualify.
Leaving these benefits unused can mean missing out on thousands of dollars over a retirement that might last decades.
How to avoid it: Review your eligibility for spousal or survivor benefits before you file. Even if you have your own work record, comparing the options ensures you don't leave money on the table.
If you feel like you might need some help with this process, a short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.
What to do next
The easiest way to avoid these mistakes is to check your Social Security account and make sure your plan matches your actual numbers. It takes a few minutes and can save you real money over time.
You can also review your broader retirement plan to see how Social Security fits with your savings, investments, and income goals.
A little attention now can protect years of future checks.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.