Social Security plays a vital role in keeping millions of seniors afloat financially. If you want to make the most of the benefits you're entitled to, then it's crucial that you avoid these major mistakes.

1. Claiming benefits too early

Your monthly Social Security benefit is calculated by taking your average monthly wage over your 35 highest-paid years in the workforce, adjusting it for inflation, and applying a special formula to that number. You're then entitled to claim that monthly benefit once you reach full retirement age, or FRA. Here's what FRA looks like, depending on when you were born:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later


Data source: Social Security Administration.

You're allowed to file for Social Security before FRA, and you can claim benefits as early as age 62. But for each month you file early, that monthly benefit gets reduced by a certain percentage. File at 62 with an FRA of 67, and you're looking at a permanent 30% hit. If you don't have much in the way of personal retirement savings, then claiming Social Security early is a dangerous move, as doing so will reduce what's likely to be your main source of income for life.

Social Security card in pile of coins

Image source: Getty Images.

2. Claiming benefits too late

Just as you're allowed to claim your Social Security benefit early, so too can you delay your filing past FRA. For each year you do, you'll boost your benefits by 8% on a permanent basis. That incentive, however, only applies until you turn 70. Past that point, there's no sense in delaying further, and if you wait too long to file for Social Security, you'll lose out on income that could've been yours.

The Social Security Administration (SSA) will pay up to six months of retroactive benefits for seniors who file after the age of 70. But if you file at age 71, you'll automatically lose money, so while it's often a good idea to delay Social Security to a point, be sure to file once your 70th birthday arrives.

3. Failing to check your annual earnings statements for errors

The SSA receives wage data on you each year that then goes into calculating your monthly retirement benefit. But when the wrong information about your wages gets reported, it could result in a lower monthly benefit for you. That's why you need to check your annual Social Security earnings statement for errors. That document summarizes your taxable wages for the year and estimates your retirement benefit at FRA. If you see that your wages were understated, you'll have an opportunity to provide the SSA with the right information and avoid having your benefits reduced because of a reporting error.

Workers who are 60 or older receive their annual earnings statement in the mail. Younger workers can access that document by creating an account on the SSA's website. Some lawmakers are fighting to have earnings statements mailed out to all workers, as doing so could get more scrutiny for them.

The decisions you make with Social Security will dictate how much income it provides you in retirement. Avoid these mistakes and get a higher monthly benefit -- for life.