A lot goes into planning your retirement and claiming Social Security, so it’s easy to make mistakes along the way.
The confusion sometimes stops people from planning so they end up rushing at the end.
Here are 8 things to help avoid major mistakes with Social Security benefits
Be sure to check your earnings record.
The record will give you an idea of what to expect for benefits and help you plan.
Checking it every year will help stop mistakes from piling up.
Another mistake people make is not working long enough.
Your benefits are calculated based on your 35 highest earning years.
If you only work for 30 years, an average of $0 is calculated for 5 of those years, dropping your benefit.
The age you claim matters, you do not want to claim too early or too late.
With this, your circumstances matter.
If you’re in good health and you retire at 62 instead of waiting until your full retirement age, you risk losing 30% of your benefit payment.
If you’re not in good health and wait until closer to 70, you risk missing out on your benefits by a lot.
Another mistake is not thinking of your spouse and their benefits or how yours may affect them.
Spousal benefits could be worth 50% of the other spouse’s full retirement age amount.
This could be especially beneficial for a spouse who did not work.
You need to plan for your Social Security benefits to be taxed.
In some situations you could pay taxes on as much as 85% of your benefits.
If you’re someone who can benefit from survivor benefits, don’t make the mistake of remarrying.
You could lose out on big benefits.
One of the biggest mistakes people make is believing that their benefits will cover the cost of living.
Social Security is designed to only cover around 40% of your previous salary.
In addition, your Medicare costs come directly out of your paycheck.
Finally, a major mistake is working and ignoring the rules surrounding working while collecting benefits.
If you retire early and work while earning over the limit, you will see $1 withheld for every $2 earned past the limit.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected].