Three Social Security Mistakes

The majority of senior workers depend mostly on Social Security benefits immediately after they retire. They believe that Social Security benefits will take care of all of their expenses after retirement. Suppose you have this belief that Social Security benefits will suffice during retirement. In that case, you should beware of these three mistakes that can prevent you from having enough money to spend after retirement.

Claiming your Social Security benefits early.

The basis for the calculation of your Social Security benefits is your history of past earnings. The average monthly earnings of your 35 years of work history are used to calculate Social Security benefits. Still, in case of inflation, there may be some adjustments to your monthly income. When you have a record of 35 years in the workforce, you can claim your Social Security benefits when you are 67 years of age, which is the federal retirement age. 

You can claim your Social Security benefits earlier than the FRA, but your Social Security benefits will be permanently reduced. Conditions such as unemployment and emergency expenses may require you to claim your Social Security benefits earlier. Suppose you don’t have any expenses that require urgent finances. In that case, you should leave your Social Security benefits until you reach the FRA because doing this will leave you with a lot of money in the future.

Claim your Social Security benefits when you are above 70 years of age

You’ll have access to the entire amount of monthly benefits when you reach the FRA. Still, suppose you leave your Social Security benefits until when you are above 70 years of age. In that case, you will receive more benefits per month. The reason is that each year you delay your Social Security benefits beyond the FRA, you will get an 8% increase to your Social Security benefits. When you’re 70 years old, you shouldn’t delay claiming your Social Security benefits because your benefits will not grow again. You could lose a considerable sum of money if you don’t claim your Social Security benefits at age 70.

You must know that for six months, you will be paid the retroactive benefits by the Social Security Administration. If you don’t claim your Social Security benefits when you are 70 years old, you will lose a lot of money. Moreover, there is no need for delaying your Social Security benefits until when you are above age 70. Save the date so that you won’t forget nor exceed the time limit.

Failure to claim the spousal benefits 

Suppose you want to claim your Social Security benefits based on your record of earnings. In that case, you may delay your benefits beyond the FRA because your monthly benefits will increase if you don’t claim them earlier. Suppose you are not working, and you want to claim your spousal benefits. In that case, there is no need to delay your Social Security benefits past the FRA since the benefits will not increase if you leave them unclaimed.

Generally, it is not fair to delay your Social Security benefits past age 70 when you retire, and there is no need for delaying your spousal benefits beyond the FRA.

Your Social Security benefits will pay for some of your expenses during retirement. Your Social Security benefits can cover your essential needs or other personal finances. However, you must avoid the above mistakes to gain from your Social Security benefits. 

Other Admin Articles

Is it Beneficial to Stay at Your Job Past Age 65?

Things To Do Five Years Before Retirement

One in Five Baby Boomers and Retirees are Dependent Upon Social Security

The Emergency Fund is The Best Protection for Your TSP.

Leave a Reply