As you retire, one of the sources of income you have apart from your personal savings, insurance and 401k contributions is your Social Security benefits. Social security may be your great source of income as a retiree if you really avoid some mistakes that can reduce your claims to it.
Avoid these 9 Social Security mistakes
The options you have as a retiree to live comfortably is not much so it is very important that you utilize each available option and prevent anything that will hinder you from maximizing it. There are some mistakes which retirees make when it comes to their Social Security benefits. Let’s briefly examine some of them.
• Avoiding work for 35 years
Do you know that if you laze about for 35 years without working, you have reduced the benefits that will accrue to you? Make sure to work actively for 35 years because the years you earn most is what will be used to calculate your benefits.
• Failure to maximize your earnings
If you earn more through salary increments or high paying jobs, you will thereby pay more taxes into the system and this will in turn get a bigger amount as Social Security benefit during your retirement. So you see, don’t rely on just that meager salary you are earning. Get promoted and boost your earnings for a better future as a retiree.
• Signing up too early
Don’t rush to sign up for your benefits as soon as you retire. If you stopped working early, you can also delay the benefits because if you sign up at the eligible age of 62 years, your monthly benefits will be reduced and this will affect your finances all the days of your life. Why not delay it and have more when you need it most as you age.
• Forgetting your rightful retirement age
Your full retirement age should not be forgotten. It is usually when you are 66 or 67 years old and this is when you are entitled to unreduced Social Security benefits. See it as your new birthday age so that you don’t forget.
• Not delaying claiming
If you delay claiming your Social Security until you are at least 70 years or before, you may not maximize it. No one knows how long they will live actually but you can decide on how long you want to delay your claims. It is really for your own benefit so consider it carefully.
• Not working together as a couple
If you are married, take the decisions together so that you can maximize your Social Security benefits. Each of you is entitled to 50% of the payments of whoever earns higher than the other. After retirement, you can boost your benefits by claiming spousal benefits first before switching back to yours which has already grown higher due to the delay.
• Not being mindful of survivors benefits
If one spouse dies, the survivor is entitled to a Social Security payment which is equal to the benefits of the higher earner. This means that if one spouse delays claiming, the benefits will grow for the surviving spouse to lay claims on.
• Earning above the limit after sign up
Unfortunately, if earning rises above the limit allowable after you sign up, you will lose money instead of increasing your benefits.
• Not checking your statements.
Many people never hard time to check their bank statement each month. If you never did, don’t forget to check your Social Security statements. Make sure to check if all your annual earnings and all the taxes you paid are correctly recorded. Don’t forget that your retirement future is at stake here.
Social Security benefit is one sure source of income during retirement. Don’t joke with it but try to maximize it to the fullest.