3 Unfortunate Ways You Could Miss Out on Social Security Benefits

Missing out on Social Security benefits could make it more difficult to achieve financial security in retirement.

While your benefits aren’t sufficient to support you, the income they provide can go a long way toward covering your basic needs — especially if you take steps to get the most money possible.

Unfortunately, far too many seniors end up losing some of the income they could have received. This can happen for a number of reasons, but here are three common mistakes that could lead to a smaller Social Security payment.

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1. Claiming benefits at the wrong time

When to claim benefits is one of the most important decisions you’ll make — and the wrong choice could lead to less money from the Social Security Administration.

You’ll be able to get your first check any time between turning 62 and reaching the age of 70. But to get your standard benefit, you’d have to claim it right at your full retirement age (FRA). That’s between 66 and four months and 67.

Some retirees are actually better off starting checks before FRA. That could be the case if they won’t live long enough for higher future checks to make up for payments they miss because they wait. But other seniors should delay their first payment as long as possible. This can make sense for those who outlive their life expectancies, as the higher monthly payments resulting from the delay could exceed income they gave up by waiting. Delaying can also result in more survivor benefits being paid out, so a higher-earning spouse may want to wait to claim Social Security in order to better provide for their surviving spouse.

It’s important to consider your health status and the impact of your filing decision on your life partner if you don’t want to miss out on Social Security.

2. Not understanding all the benefits you’re entitled to

Not understanding all the benefits you’re eligible for could also mean missing out on income. This could happen in a number of different ways:

You could miss out on spousal or survivor benefits: This is a common problem for people who have divorced and who don’t realize they’re still eligible for these benefits as long as their marriage lasted at least a decade. These benefits can sometimes add up to more than the income you’d receive on your own work history.
You could end up claiming Social Security too early because you don’t realize that disability income was available: If you become disabled in your early 60s, filing for Social Security Disability Income (SSDI) could make it possible to delay claiming retirement checks and avoid unnecessary early filing penalties.
You could miss other benefits you’re entitled to: For example, low-income retirees need to know if they are eligible for Supplemental Security Income (SSI), which may supplement retirement checks.

You don’t want to leave money on the table, so be sure to research all the different kinds of benefits that could be an option for you.

3. Working for too few years

Finally, if you quit work before establishing a long career history, benefits could also be reduced. That’s because Social Security benefits are calculated based on average wages over 35 years (although you can become eligible for benefits after working for only 10).

If you don’t have a 35-year work history, the years you earned nothing will reduce the average wage used to calculate your benefits. And workers earning more at the end of their careers could also forgo the chance to boost benefits if they don’t work even longer than 35 years. In this case, putting in extra years at a higher salary will raise the average wage used to calculate benefits because high-earning years would replace lower-earning ones.

If you don’t want to miss out on Social Security income, you should aim to avoid these three big mistakes that could inadvertently reduce your benefits — and thus put your financial security in jeopardy.

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