15 Social Security Mistakes You Can't Afford to Make

There's a good chance you'll rely heavily on Social Security once you enter retirement. And that's why you can't afford to make any mistakes with regard to your filing. With that in mind, here are some blunders you must take care to avoid.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Many seniors rush to claim Social Security at 62 because it's the earliest age to sign up. That's not a bad move for everyone -- but it's very unwise for seniors who don't have a lot of savings to fall back on. If you claim benefits at 62, you'll slash them by 25% to 30% -- for life. That's a hit you probably can't afford to take if your nest egg is negligible.

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Medicare eligibility begins at age 65. But full retirement age for Social Security purposes doesn't kick in for a year or more later. And for each month you claim benefits before full retirement age, they get reduced on a permanent basis. It's more than possible to enroll in Medicare without signing up for Social Security, even when that enrollment takes place on the Social Security Administration's website.

Full retirement age isn't universal. It depends on your year of birth. If you were born in 1960 or later, it's 67. Otherwise, it's 66, or 66 and a specific number of months. Knowing your full retirement age could help you avoid claiming benefits too soon -- and reducing them in the process.

For each year you delay your Social Security filing past full retirement age, your benefits will increase by 8%, up until the age of 70. Delaying your filing is a smart move when you're low on savings and need a higher payday from Social Security. But if your health is poor, that doesn't apply. That's because you may not live long enough to come out ahead financially after waiting so many years to start getting your money.

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Though holding off on filing for Social Security can make financial sense, once you reach age 70, your benefits can no longer grow. And so if you delay your claim beyond that point, you could end up losing out on money you're entitled to.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Knowing how much income to expect from Social Security can help you better plan for retirement. But if you don't get an estimate of your benefits ahead of time, you might fall short on savings or make other bad decisions that hurt you financially. You can get an estimate of your future benefits by creating an account on the Social Security Administration's website and pulling up your annual earnings statements.

If you're an average earner, Social Security will replace about 40% of your pre-retirement wages. Most seniors, however, need more like 70% to 80% of their former income to manage their bills, so don't be fooled into thinking you'll get by just fine on Social Security alone.

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If you have a spouse who's much younger than you, delaying your Social Security filing could pay off. If you pass away, that spouse will be entitled to a survivors benefit equal to 100% of the benefit you were eligible for. And so the less you collect, the less of an income stream you'll leave behind for your spouse.

Many seniors are shocked to learn that federal taxes apply to Social Security benefits. This isn't always the case, and if you really have no income outside of Social Security, you'll get out of paying those taxes. But moderate earners commonly have enough income to lose a chunk of their benefits to taxes.

In addition to federal taxes on Social Security, there are 13 states that impose their own tax on benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. Taking up residence in one of these states isn't necessarily a bad move, because some offer a low cost of living. What is a mistake, however, is not knowing which states tax Social Security and which don't.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The monthly Social Security benefit you're eligible for in retirement will be based on your earnings during your most profitable 35 years in the workforce. But if you don't put in at least 35 years, you'll have $0 factored into that equation for each year you don't have an income on file. The result? Less money for you.

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The more money you earn during your career, the higher a Social Security benefit you can snag. You may not be motivated to boost your income in the near term, but if you make that effort, it could result in a much higher monthly paycheck throughout your retirement.

You're allowed to earn a paycheck and collect Social Security at the same time. But if you do so before reaching full retirement age, you'll risk having some benefits withheld if your earnings exceed a certain threshold. If you're able to earn a decent wage by working part-time, you may want to hold off on claiming Social Security to avoid a reduction in benefits coupled with benefits that are withheld and paid to you later.

When you're claiming Social Security against your own work record, you can snag an 8% boost for each year you delay your filing past full retirement age. But if you're claiming a spousal benefit based on a current or former spouse's record, there's no sense in not signing up at your full retirement age. That's because spousal benefits can't increase the same way primary benefits do.

ALSO READ: The Simple Reason to Delay Taking Social Security as Long as Possible

Your Social Security number is an important piece of identification. And if it gets into the wrong hands, you could become a victim of identity theft. If you call the Social Security Administration for help with an issue, you're free to verify your number with them. But don't ever give out that number to someone who asks for it in an unsolicited fashion.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The more you know about Social Security, the less likely you'll be to make a costly mistake that hurts you during your senior years. Make every effort to avoid these errors at all costs. Doing so could set the stage for a much better retirement.

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