Millions of seniors rely on Social Security to cover their living expenses. But if you're not careful, a seemingly innocent mistake on your part could cause you to lose out on valuable retirement income. Here are a few major traps to steer clear of.

1. Filing early because you're worried benefits will disappear in the future

The monthly Social Security benefit you're entitled to is based on your earnings history. But you can only claim that full benefit once you reach full retirement age -- either 66, 67, or somewhere in between, depending on your year of birth.

Although the Social Security Administration (SSA) will let you file as early as age 62, doing so before full retirement age will reduce your monthly benefit permanently. Some people, however, claim Social Security early because they're worried the program is going broke, and that if they don't snag their benefits as soon as possible, there won't be any money left over to pay them.

Older man using ATM


But actually, Social Security is not going bankrupt. Though the program may need to reduce benefits in the future, that's not set in stone, whereas if you claim your benefits early, you're guaranteed a lifelong reduction in your Social Security payments. Therefore, unless you have a pressing reason to file ahead of full retirement age, like losing your job and needing the money, you should sit tight and wait to claim your benefit in full.

2. Filing at full retirement age because you think you have to

Though age 62 is the most popular age to file for Social Security, many seniors do wait until full retirement age to take their benefits. And while that's a good way to avoid a reduction in those monthly payments, it's not necessarily the best way to maximize your Social Security income. That's because the SSA allows you to delay benefits past full retirement age and boost them by 8% for each year you do, up until age 70.

Delaying benefits is a wise move to consider if you're kicking off your senior years without much savings. As such, if you file at full retirement age because you think you must claim benefits at that point, you could be doing yourself a disservice.

3. Delaying benefits too long

Waiting until age 70 to claim Social Security can give you a much larger monthly benefit for life. But the credits you'll accrue for delaying your filing can't accumulate past age 70, and so you shouldn't delay benefits after that point, because in doing so, you'll only deny yourself income you're entitled to.

Now if you don't file upon turning 70, but rather, you do so a few months later, you're not exactly out of luck, because the SSA will pay you up to six months of retroactive benefits. But if you wait too long to claim Social Security, you'll deprive yourself of income for no good reason.

The decision to claim Social Security isn't an easy one. Before you file for benefits, understand the financial ramifications involved. A little research on your part could prevent you from choosing the wrong filing age -- and reducing your retirement income substantially in the process.