5 Social Security Mistakes That Can DEVASTATE Your Retirement 😬
Social Security is often a cornerstone of retirement income for many Americans. It provides a safety net and can substantially impact your overall financial security. However, navigating the complexities of Social Security can be challenging, and making mistakes can lead to significant financial repercussions during retirement. Here are five common Social Security mistakes that could devastate your retirement finances—along with tips on how to avoid them.
1. Claiming Benefits Early
One of the most significant mistakes retirees make is claiming Social Security benefits as soon as they turn 62. While it may be tempting to start receiving benefits early, doing so can reduce your monthly payments permanently. For each year you claim before your full retirement age (FRA), your benefit is reduced by as much as 30%. Delaying benefits until your FRA or even until age 70 can increase your monthly payment dramatically, helping to ensure a more comfortable retirement.
Tip: Evaluate your financial situation and consider delaying benefits if possible. Use online calculators to understand how your monthly benefit changes based on your claiming age.
2. Not Understanding Spousal Benefits
Married couples often overlook the potential benefits available through spousal claims. If one spouse has a significantly higher earning record, the other may qualify for spousal benefits of up to 50% of the higher earner’s benefit at their FRA. Failing to claim spousal benefits effectively can mean missing out on additional income.
Tip: Couples should explore all claiming strategies available to them, which may include filing for spousal benefits and then switching to their own benefits later on. Consulting with a financial advisor experienced in Social Security can be invaluable.
3. Ignoring Social Security Taxes
Many retirees are unaware that Social Security benefits can be taxable, depending on your combined income, which includes wages, interest, dividends, and other income sources. If your income exceeds certain thresholds, up to 85% of your Social Security benefits may be subject to federal income tax, which can significantly reduce your net income.
Tip: Plan for taxes on Social Security benefits by understanding your income sources and how they affect your tax liability. Consider strategies to minimize your taxable income, such as tax-deferred investment accounts.
4. Failing to Consider Survivor Benefits
In the event of a spouse’s death, the surviving partner may be eligible for survivor benefits, which can be up to 100% of the deceased spouse’s benefit. Many individuals focus solely on their benefits without considering the financial security of their survivor. If a higher-earning spouse claims benefits early, this could cause a financial strain on the surviving spouse.
Tip: When planning for retirement, think about the long-term implications of your claiming strategy on your spouse’s future financial stability. A comprehensive retirement plan should include discussions about survivor benefits.
5. Not Staying Informed on Changes to Social Security
Social Security rules can change, and benefits can be adjusted based on new legislation or budget considerations. Many retirees lose out on potential benefits simply because they aren’t aware of their options or any changes that may affect them. For instance, the way earning income impacts Social Security benefits may evolve over time, influencing your payment schedule or amounts.
Tip: Stay informed by visiting the official Social Security Administration (SSA) website regularly. Engage in forums, join retirement planning workshops, or consult a financial planner who specializes in Social Security. Knowledge is power when it comes to maximizing your benefits.
Conclusion
Avoiding these common Social Security mistakes can significantly enhance your financial well-being in retirement. Proper planning and understanding of the Social Security system can make a world of difference in ensuring that your golden years are indeed comfortable and fulfilling. By educating yourself and seeking professional advice, you can make informed decisions that protect your retirement income and provide peace of mind for you and your loved ones. Remember, a little forethought can go a long way in safeguarding your financial future!
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We all know that Kamala and the democrats want to give our SS benefits to the criminal illegal immigrants, especially the child rapists and murderers in the form of payments and sex change operations. If she wins, I will definitely start taking SS at 62 before its all gone.
I RECEICED THE OVER PAYMENT LETTER TWO TIMES. Okay they say I was overpaid $1,620, I allowed them to deduct it from my monthly direct deposits to my bank which showed $450.00 – the amount of payment for three months and $270.00 deducted for one month, totaled $1,620.00. I retired Oct. 2020 at 62 of age working as a part time school bus driver, Nov, 2020 I received my first retired payment in the amount of $ 989.00 it incresed to $111.00 monthly over two years, I totally quiet working May 10 2022, then I received the second letter of overpayment that same month saying I been overpaid $1,390.00. So Aug, 2022 I allowed them to take the minimum amount of $39.00 each month which is still being take to this day, I MADE A APT, to in person for them to show me where it came from. I was told it looks like the total $1.620.00 first over payment was not completed, but they are the ones who deducted and deposited the difference directly to my bank account, I was able to show them proof of all the bank deposits they made monthly with the deducted amounts and the end of the year statements they have sent me, which shows amounts of a few THOUSANDS OF DOLLARS deducted for over payments for me for only two years.. Well the reinconsideration form along with all the proof statements, I always kept all papers everything sent to me from them. I have faxed it all to them, I was informed that they have all the paper proof I sent, Now I get no resoponce or replies to any calls about this matter, it shows they owe me. I have left many voice mails to a asigned Rep. NO REPLY, I NEED TO TALK TO THE CEO BELEIVE AND WOULD LIKE TO KNOW HOW TO ACTUALLY GET TO SPEAK TO THE HIGHER UP, HIS NAME IS Martin O' Malley?
I need a Lawyer to Appeal SSA Denial of my SS Pension benefits, 30 days left,!
I live in Indiana, Indianapolis
moronic advice from a narcissist
I know someone who received an overpayment. He took SS early and it took a while for SSA to determined he's received more than the limit in the year he retired.
The tax point isn’t serious. You draw as much SS as you can, and you draw from other sources, to get the income you need to live. And you pay the taxes from these sources.
A poster said she received both her low benefit based on her PIA, AND then 50% spousal benefit. She was glad, but I posted that under current law SSA can claw back for all years.
Hi. You are great. I called S.S a few years ago and they told me that they will no longer do the switch?????
If Social Security continues to be underfunded, then In 2033, the benefits will be reduced by 30%.
I suggest that a $1/ barrel tax be charged to all oil exported out of the United States, and the money be applied to the Social security funding.
2020 The year of Covid was looking to be a bad year for my earnings so I took the Social Security Survivor benefit. Lo and behold I had a good year. I was way over the earnings limit. I figured they would catch up with me when I filed taxes in 2021. I heard nothing from them and kept getting the payments. So I called them in November 2021 and stopped the payment. I finally got those over payment letters. I kept them on file and did nothing. They stopped payments to me for 15 months until everything was caught up. I will wait until I am 70 to take my own benefit.
Hi I watch your videos and learn alot but the one most important question I have is, when I turn 62 I plan to draw social security and work part time but I have been told so many different things about how much I can have in my bank, please help me with this
I took mine at 62. Why wait till 70. What kind of health will you be in at 70. What if you don't make it. Tomorrow is not promised.
So…where do I find someone who will help look out for My benefit when I file?
Hmmmmmmmmmmmmm. So that's what happens with over payments. You have to work + SS Check to survive, especially if you live in a Democratic State.
Thanks, Devin. I appreciate all the good info. I will be 70 next May. Is there a way I can postpone my first benefit check until 1/1/2025 without losing any benefits?
I'll never understand that "break-even" mentality of Americans! I consider SS an annuity, and I waited until 70 to max out SS. I made this decision REGARDLESS of my life span! If my lfe is long (into my late 80s or early 90s), then I lucked out. If I die at 74, then I won't care anymore since I'll be dead, lol! I have NOT regretted my decision. I get over $4,000 a month in SS, and the last 8.7% increase amounted to several hundred dollars. My SS covers a big part of my monthly expenses. I also get a pension and rental income, and have no debts. I probably won't have to touch my investment portfolio, ever.
My wife has passed away at 42 years old. I have 2 small children with her and do to her ilness i am out of work at the moment. I had interview with social security said my kids will get survivor benefits and they asked if i wanted to apply since out of work. Will taking for myself mess up when im 62. Iam 50 years old and I can kinda use it at the moment.Thank you
Can I take Spousal benefits if my spouse is not yet collecting SSB?
I still must wait until I am 68 years of age Yet my full age retirement by the Social Security Administration is 66 years and 10 months .I will not be penalized by the IRS for taxing my age of accepting Yet the IRS rules along with Social Security Administration We tax me to death I know a man at work he was fined by IRS around $5400.00. Because he required to work overtime as a Supervisor.
I tried the link, but it does not work.
I’m trying to figure out how to get off of SSI and onto SSDI because it’s not fair that I have paid in over 10 years and because of a gap of two years, they wanted to deny me my benefits of the trust of which they already had a fiduciary duty to perform .
Breach of fiduciary, duty or fiduciary obligation is a big no-no from what I have found out .
I am in Opelika, Alabama. The magistrate was in Montgomery, Alabama for the hearing.
Do social security take in to account if you worked two jobs for 8 hrs at 67 yrs to quslify.
The single most important thing that you need to know when choosing when to take your SS is this. More per month does not always mean more total. The reason the payments at age 62 are less is because you are going to get more checks. 48 more than if you wait until age 66 and 96 more if you wait until age 70. That said, the one piece of information that will determine which choice is better you don't have. And that is what is going to be the date of your death? With and average life expectancy in the Unites States of around 77 years and needed to live to almost 80 for waiting to make a difference, the math would suggest to take the money early. Then it's also important to put a value on your time. Would you rather have more retired time, or more money when you are almost 80. I retired 7 years ago at the age of 62 because time was more valuable to me than money. That said, everybody get's to choose for themselves.
Very Informative. Can you help in this specific instance.
My FRA would be this year( 2023) in JULY but I will begin receiving my SS in March of this year (four months early of FRA). I also want to continue working until Sept. of this year. By the end of Sept I will have made 50,000. Will I have to pay any penalties'?
Hi Devin. Thank you for your videos. I am currently retired, but 2 years before my "full retirement age", and receive a monthly pension benefit from my former employer. My SS benefit would be based on income I received while paying into SS over my 40 year career. I have not yet applied for SS b/c I am fortunate in that I can wait. I want to go back to work doing something different, but I am concerned about the extra income because I have to apply for Medicare this year. Re, the social security income limit, is my pension income considered "earnings"?
planning for it to be there is #6.
The whole system is a joke. Mistakes???? Far to complicated by design.
What would your plan cost ?
Thank you for all you do to help us unravel SS!
Is it adjusted gross income the tax is paid on or gross income?
If errors are found in ones record how does one address SSA to get the numbers corrected?
What happens if you spouse is getting SSI also
At 9:58, you say the IG reported $131,000,000,000, “billion,” underpaid to 9,224 individuals equals $14 million per person. @Tor Eckman noted the same thing . Please provide the link to that data—that's not right.
how much do these guys charge?
There is only one mistake to worry about. Do not collect un til you are 70.
I am a widow when do I file for my husband's social security I am 60 and on SSI
Great info Devin!
How old do you have to be to start receiving spouse social security? My wife passed away in 2008, I was 52 years old then.
how do you correct ss records.. i have a 20 year gap in my ss records showing zero. can that be fixed.. ss says NO
I think I solved the SS at 62 vs. 70 debate. If you are fat and a smoker, you can and should take it at 50. Why, you probably won't make it to 62. LOL
The biggest mistake any of us can make is to collect Federal welfare too early. SS will there when we turn 70. And oh yeah, your check will be much larger.