In an ideal world, you wouldn't be counting on Social Security for the bulk of your retirement income. Most seniors need 70% to 80% of their former paychecks to live comfortably once they stop working, and Social Security will replace about 40% of that sum among average wage earners.

But still, that 40% is a substantial sum, and as such, it pays to get the most money out of Social Security as you can. But if you fall victim to these mistakes, you could wind up hurting financially during your senior years, especially if you enter that stage of life without much in the way of personal savings.

Older man and woman at laptop, covering their mouths as if in shock


1. Filing too early

The earliest age you can sign up for Social Security benefits is 62, and as such, it's the post popular age to file. But you're not actually entitled to your full monthly benefit until you reach full retirement age, or FRA, and that doesn't kick in until age 66 at the earliest. If you claim benefits before FRA, you'll reduce them on what will generally be a lifelong basis.

What sort of income hit are we talking about? Let's imagine you were born in 1960 or later, in which case FRA isn't until 67. If you claim benefits at 62 because you're in a rush to get that money, you'll shrink your monthly benefit by 30%. If you're entitled to $1,500 a month, which is in line with what the average senior collects today, you'll wind up with $1,050 a month, instead. And if that's your main source of income, you're more likely than not to wind up struggling to pay the bills.

2. Not working long enough to secure a decent benefit

The monthly benefit you're entitled to at FRA is based on your earnings history -- specifically, your 35 highest-paid years in the workforce. But if you don't have 35 years of employment under your belt, you'll have a $0 factored into your personal benefits equation for each year you're missing income, thereby leaving you with less of a benefit each month.

Again, this isn't as large an issue if you enter your senior years with a healthy amount of retirement savings. But if you come in with a tiny nest egg (or worse yet, no nest egg at all), then that hit could be extremely problematic.

The solution? Make sure you have 35 years of earnings on record, and if you can't extend your career on a full-time basis to make that happen, continue working part-time. Replacing each $0 on file for you with some amount of income is better than leaving those $0s in place. Keep in mind that independent wages count for Social Security purposes, so if you can no longer stand the idea of reporting to an employer, become a consultant or start your own venture. As long as you pay Social Security tax on that income (which you'll need to do), it will count toward your benefits.

3. Not reviewing your earnings statements for errors

The Social Security Administration (SSA) issues annual earnings statements to all workers. Yours will not only summarize your taxable wages for the year, but also estimate your monthly benefit in retirement. It's crucial that you review your statement each year for errors because if your employer underreports your wages, it could bring down your benefit. For example, if you earned $42,000 in 2019, but the SSA only shows $32,000 on record, that's a mistake you'd want to fix.

If you're 60 or older, you'll get your earnings statement in the mail. If not, you can access it online by creating an account on the SSA's website.

It's a good idea to kick off your golden years with a healthy level of savings and not rely too heavily on Social Security. But a large number of Americans are behind on building their nest eggs, and if you're one of them, you'll need all of the Social Security income you can get. By avoiding these mistakes, you'll help secure the highest benefit you're entitled to, and with any luck, it'll be enough to cover your expenses.