Social Security, Strategies & Tips

Three Simple Mistakes That Impact Your Social Security Benefits

The average Social Security beneficiary receives $17,532 per year today. You could be entitled to much more when the time comes to file if you avoid these three simple mistakes.

  1. Not waiting until full retirement age to file

You can legally start collecting Social Security benefits at age 62, but you won’t receive the full benefit until you reach your full retirement age. For each month that you claim Social Security ahead of your full retirement age, your benefits will be reduced. Unless you manage to withdraw your application within a year of filing, your benefit will be capped at the reduced rate for the rest of your life. The largest reduction is 30%, which occurs if your full retirement age is 67, but you filed at the earliest possible age of 62.

From this full reduction, the Social Security Administration will add to your benefit month by month if you defer retirement all the way up to age 70. Since the full retirement age ranges from 65 (if born in 1937 or earlier) to 67 (if born in 1960 and later) depending on when you were born, you may want to look it up on the Social Security Administration’ Benefits by Age of Birth table.

For planning purposes, you can look up how many years and months it will take to reach full retirement using a date calculator such as For example, someone born on April 20, 1958, will receive full benefits when he or she is 66 years and 8 months. This age will be achieved on Friday, December 20, 2024. Age 70 for the same person is attained on Thursday, April 20, 2028.

  1. Not working a full 35 years

Social Security benefits are calculated based on your top 35 working years. If you started working at age 22 and retired at age 67, your career would have lasted 45 years. Thanks to inflation, your early years of income are likely to be pretty modest by today’s standards. If you took a break because of unemployment or to raise children, you might have less than 35 years of earnings. Every year less than 35 with no earnings is factored into the benefits calculation as $0. So, you lose 3.5% of your benefits every year without reportable wages. If you are in this boat, you might want to consider working a few more years to make up this difference.

  1. Not checking your earnings statements

Every year the Social Security Administration sends a report to workers summarizing their taxable wages for that year and what the benefits might look like in retirement. If you’re under 60, you won’t get a copy of this statement in the mail, but you can access it on the Social Security website. In either format, it pays to review your earnings statement every year. For example, you might find no income on record for you during a year when you actually worked, or the amount on record is lower than what you actually earned. If you spot an error and get it fixed, you could avoid a needless reduction in benefits.




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