3 Social Security Mistakes You Probably Don’t Even Realize You’re Making

Applying for Social Security is pretty easy at first glance. Once you’re eligible, simply fill out an application, provide your bank details, and the money will appear in your account each month.

That’s really all you have to do to collect checks, but if you want the biggest possible checks, there are a few other things you need to do, as well as a few mistakes you’ll want to avoid. Here are three things you can’t afford when trying to maximize your monthly utility.

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1. Don’t check your income records

Your Social Security benefit is based on how much you pay in Social Security taxes throughout your career. The government tracks this in your income file. You can view yours by creating a My Social Security account. After answering the identity verification questions, you can view your earnings history record for each year you worked.

The Social Security Administration gets their data from the IRS, so it’s usually accurate, but mistakes can happen if you or your employer make a mistake in your tax records. The government could also mistake you for someone else with the same name. The most damaging mistakes result in not reporting income that you know you worked for a year. This can permanently shrink your Social Security checks. That’s why you should check government figures every year.

Fortunately, you can correct any errors you find by filing an income record correction request with the Social Security Administration, along with any documentation showing your actual income for the year. The government will review this and update as necessary.

One thing high earners should be aware of is that you don’t always pay Social Security taxes on all of your income. For example, in 2022, you only pay Social Security taxes on the first $147,000 you earn. If you earn more than this amount, your earnings log for that year will only show $147,000, and that’s not an error.

2. Make claims immediately without understanding the implications of your decision

You’re eligible for Social Security at age 62, but not everyone realizes that filing then permanently shrinks your checks. You must wait until your full retirement age (FRA) to enroll if you want to receive the full benefit your work history has earned you. For today’s workers, this is between 66 and 67 years.

You’ll get more checks if you apply under your FRA, but each will be up to 25% smaller if your FRA is 66, or 30% smaller if your FRA is 67. Whether applying early is a smart move for you depends in part on how long you live. Those who do not expect to live past age 70 tend to benefit better from the program if they enroll before their FRA. But those living in their 80s or beyond can fall short this way.

Every month you delay, Social Security increases your checks a little until age 70. Then you reach your maximum benefit of 124% of your full benefit per check if your FRA is 67, or 132% if your FRA is 66. Delaying benefits could result in a larger lifetime pension, but only you can decide if you want to fund your own retirement into 70.

3. Not discussing your entitlement strategy with your family

Single adults can only make Social Security decisions based on what’s best for them, but married couples and seniors with dependents need to consider how their decision will affect everyone in their household.

Spouses of qualified workers may claim Social Security benefits on their own employment records if they qualify, or they may receive spousal benefits on their partner’s employment records. Spousal benefits are worth up to half the employee’s benefits with their FRA, but a spouse cannot claim this until the employee registers with Social Security.

Similarly, minor children and adult children who were permanently disabled before the age of 22 might also be eligible for Social Security benefits based on their parents’ work history. But like spouses who claim their partner’s work records, children cannot claim these benefits until the worker enrolls.

If any of these apply to you, it may make sense to register earlier than you otherwise would so that your other household members can take advantage of benefits. Discuss all your options with everyone involved and decide when each person will file for Social Security.

The steps above are a great way to maximize your Social Security benefits, but don’t just do them once and forget about it. You should review your income record every year while re-evaluating your claims strategy. Your retirement plans may change over time, and your Social Security plans should adjust accordingly.

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