By using this site, you agree to the Privacy Policy and Terms of Use.
Accept

Indestata

  • Home
  • News
  • Personal Finance
    • Credit Cards
    • Loans
    • Banking
    • Retirement
    • Taxes
  • Debt
  • Homes
  • Business
  • More
    • Investing
    • Newsletter
Reading: 7 Mistakes You’re Making With Social Security Benefits And Don’t Know It
Share
Subscribe To Alerts
IndestataIndestata
Font ResizerAa
  • Personal Finance
  • Credit Cards
  • Loans
  • Investing
  • Business
  • Debt
  • Homes
Search
  • Home
  • News
  • Personal Finance
    • Credit Cards
    • Loans
    • Banking
    • Retirement
    • Taxes
  • Debt
  • Homes
  • Business
  • More
    • Investing
    • Newsletter
Follow US
Copyright © 2014-2023 Ruby Theme Ltd. All Rights Reserved.
Indestata > Debt > 7 Mistakes You’re Making With Social Security Benefits And Don’t Know It
Debt

7 Mistakes You’re Making With Social Security Benefits And Don’t Know It

TSP Staff By TSP Staff Last updated: August 7, 2025 7 Min Read
SHARE
Image source: Pexels

For most Americans, Social Security is the backbone of retirement income. Yet despite its importance, many people unknowingly make costly mistakes that reduce their monthly benefits, trigger unexpected taxes, or create long-term financial strain. Social Security may seem straightforward on the surface, but under the hood, it’s a complex system filled with rules, deadlines, and exceptions that can trip up even the savviest retirees.

You may think you’re playing it safe or “doing what everyone else does,” but that’s exactly how costly oversights happen. From claiming too early to underestimating the impact of working in retirement, here are seven mistakes you could be making with your Social Security benefits, without even realizing it.

Mistake #1: Claiming Benefits Too Early

It’s tempting to start collecting Social Security as soon as you’re eligible at age 62, especially if you’re no longer working. But claiming early means permanently reduced benefits. For every year you claim before your full retirement age (which ranges from 66 to 67, depending on your birth year), your monthly check can be reduced by up to 30%.

This smaller amount doesn’t just affect you—it also affects survivor benefits for your spouse if you pass away. Unless you truly need the income right away, waiting until full retirement age, or even delaying until 70, can substantially increase your lifetime benefits.

Mistake #2: Underestimating the Earnings Limit

If you claim Social Security before your full retirement age and continue working, your benefits may be reduced if your earnings exceed a certain threshold. In 2025, that limit is $22,320. For every $2 you earn over the limit, $1 is withheld from your benefits.

Many people mistakenly believe they can “double dip” by working full-time and collecting benefits early. But if your income is too high, your payments could be slashed, only to be recalculated later. While the withheld amount is eventually credited back starting at full retirement age, the short-term loss can be surprising and financially inconvenient.

Mistake #3: Ignoring Spousal and Survivor Benefits

Spousal benefits are one of the most misunderstood aspects of Social Security. If you’re married, divorced, or widowed, you may be eligible to receive benefits based on your spouse’s (or former spouse’s) work record—even if you never worked yourself.

Many retirees leave money on the table by not coordinating their benefit strategies as a couple. For example, in a two-income household, it may be better for the lower earner to claim earlier while the higher earner delays to maximize survivor benefits. Knowing how spousal and survivor rules work can make a significant difference in your household income.

Mistake #4: Assuming Benefits Aren’t Taxable

Yes, Social Security benefits can be taxed—up to 85% of them, depending on your total income. This surprises many retirees who thought their Social Security payments would be tax-free.

If your “combined income” (which includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits) exceeds certain thresholds—$25,000 for individuals or $32,000 for couples—you could owe taxes on a large portion of your benefits. Poor planning can push you into a higher tax bracket, so it’s important to account for this in your retirement income strategy.

Mistake #5: Not Reviewing Your Earnings Record

Your Social Security benefit is based on your top 35 years of earnings. But what if those earnings were reported incorrectly—or not at all?

The Social Security Administration doesn’t automatically verify your income. It’s up to you to review your earnings record and report any errors. If you don’t catch them in time, you could lose out on thousands in lifetime benefits. Make a habit of checking your annual Social Security statement, available online, to confirm that your work history is accurate.

Mistake #6: Thinking You’re “Too Rich” to Care

Even high earners sometimes underestimate the importance of Social Security. They may assume their retirement accounts will cover everything, so they claim early or make uninformed decisions. But with people living longer and market volatility a constant concern, Social Security offers something that few other sources of income do: a guaranteed, inflation-adjusted payment for life.

Maximizing this benefit isn’t just for those with limited savings. It’s smart risk management for any retirement plan. Walking away from higher lifetime benefits just because you can afford to feels like leaving money on the table.

Mistake #7: Going It Alone Without Professional Guidance

Social Security may be a government program, but it requires personalized strategy. Your ideal claiming decision depends on your health, income needs, marital status, and long-term goals. Yet many retirees make decisions based on hearsay, outdated rules, or a gut feeling.

Speaking with a financial advisor, especially one who understands Social Security optimization, can help you avoid costly errors. A one-size-fits-all approach simply doesn’t work here, and even small tweaks to your plan can add up to significant gains over time.

Final Thoughts: The Cost of Getting It Wrong

Social Security may feel like just another checkbox on your retirement to-do list, but it’s a critical part of your financial foundation. Making even one of these common mistakes can reduce your benefits, increase your taxes, or leave your spouse with less income in the future.

Fortunately, these errors are preventable. With the right knowledge and a bit of planning, you can maximize what you’ve earned, protect your household, and ensure your benefits work for you, not against you.

Have you already claimed Social Security, or are you still weighing your options? What factors are shaping your decision?

Read More:

9 Social Security Assumptions That Will Cost You Thousands

Why Social Security Won’t Be Enough, Even If You Think You’re Ready

Read the full article here

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Share This Article
Facebook Twitter Copy Link Print
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Previous Article Pets and Renters Insurance: Why You Need It
Next Article The Private Listing Controversy In Real Estate
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FacebookLike
TwitterFollow
PinterestPin
InstagramFollow
TiktokFollow
Google NewsFollow
Most Popular
How Many Mortgage Lenders Should I Apply To?
August 7, 2025
Could Helping Your Adult Child Financially Jeopardize Your Benefits?
August 7, 2025
Provisional Income: What Is It and How Is It Taxed?
August 7, 2025
Can You Deduct Charitable Donations Without Itemizing Taxes?
August 7, 2025
What Will Be The Next Trillion-Dollar Stock?
August 7, 2025
The Private Listing Controversy In Real Estate
August 7, 2025

You Might Also Like

Debt

How Many Fees Are Hiding in Your Retirement Community Bill?

9 Min Read
Debt

10 Things You’re Paying for That Were Once Free Before Retirement

9 Min Read
Debt

8 Bills You Should NEVER Pay If You’re Broke

9 Min Read
Debt

Who Really Controls Your Estate if You Become Incapacitated Without a Plan?

10 Min Read

Always Stay Up to Date

Subscribe to our newsletter to get our newest articles instantly!

Indestata

Indestata is your one-stop website for the latest finance news, updates and tips, follow us for more daily updates.

Latest News

  • Small Business
  • Debt
  • Investments
  • Personal Finance

Resouce

  • Privacy Policy
  • Terms of use
  • Newsletter
  • Contact

Daily Newsletter

Subscribe to our newsletter to get our newest articles instantly!
Get Daily Updates
Welcome Back!

Sign in to your account

Lost your password?