Now more than ever, Americans need Social Security to help them make ends meet after they retire. But if you don't understand how your benefits work, it's easy to make big mistakes that can cost you hundreds of thousands of dollars in benefits over the course of your lifetime.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through one basic mistake that many people make about choosing when to start taking Social Security. Dan discusses a Kiplinger study that found that 70% of veterans didn't know the extent to which taking benefits as early as age 62 would reduce their monthly payments compared to waiting until full retirement age. Meanwhile, 90% of those surveyed didn't realize that by waiting until age 70, they can boost their payments by as much as 32%. Dan points out that even though the survey addressed veterans specifically, many others don't know the basic information they need to make smart decisions about taking benefits. Without knowing the facts, though, you could put your retirement at risk.