When you retire, you are most likely going to need Social Security to help you make ends meet.  These benefits are important to seniors because they provide not just a guaranteed income but also one protected against the impact of inflation. 

Because of this, it’s critical to avoid mistakes that end up costing you some of your benefits. Here are three of the biggest errors people make, which you cannot afford if you want a generous Social Security check to help you enjoy a secure future.

1. Claiming benefits at the wrong time

The first mistake many people make is claiming Social Security benefits at a sub-optimal time.

Social Security benefits are claimable as young as age 62, but just because you can get benefits at a young age doesn’t mean you should. Your age when you start your payments has a huge impact on the lifetime and monthly income you get, so you must be strategic. To do that, you need to know when your Social Security full retirement age is, whether you are claiming before or after FRA, and how your choice impacts your check size. 

Your FRA is based on birth year but will be 67 for anyone born in 1960 or later. If you claim at full retirement age, you get a standard benefit based on a percentage of average wages during your highest-earning 35 work years. However, claiming before FRA results in early filing penalties and can also shrink survivor benefits. A late claim does the opposite, increasing your benefits and potentially those of your widow. Unfortunately, many people claim benefits at 62 without fully understanding how this impacts their monthly and lifetime income.

Studies have shown the best age to claim benefits for 7 in 10 retirees is actually age 70, as later claims result in more lifetime income for the majority of seniors thanks to life spans that have gotten longer since Social Security was created. 

To avoid claiming benefits at the wrong time, don’t rush into filing for your checks to start. Instead, you should carefully consider your health status as well as whether you were the higher-earning spouse. If you’re relatively healthy or if you earned more than your spouse and they’ll rely on your survivor benefits, then it would likely be a mistake to start young. On the other hand, if you are in poor health or need the money to enable early retirement, then starting checks sooner rather than later makes good sense.

A financial advisor can help you decide whether an early or late claim is best your financial circumstances.

2. Over-relying on Social Security 

There’s another huge mistake you absolutely cannot afford. You can’t plan to rely too much on Social Security.

Now, you will definitely get benefits and those benefits will be an important income source. But they cannot be your only source of funds. That’s because Social Security is only meant to replace about 40% of pre-retirement income as it is supposed to work in conjunction with your pension and savings to support you. If you don’t have a pension, then your savings will need to pick up the slack to help you maintain the lifestyle established while you were working.

You likely cannot afford a 60% pay cut, so don’t retire and claim Social Security until you are confident you have enough supplementary savings to live on. You can use your mySocialSecurity.gov account to estimate your benefit, depending on how old you are when you claim it, then compare this to your income needs to see how much money your savings must produce. As long as your investment accounts can provide those funds at a safe withdrawal rate, then you’re good to go. If they can’t, you’ll have to work on saving more before you stop work and find yourself falling short. 

3. Failing to know the rules for spousal and survivor benefits

Finally, claiming Social Security benefits before understanding how spousal and survivor benefits work could be a huge error as you could leave a lot of money on the table.

Spousal benefits can equal up to half of the primary earner’s standard benefit if you claim them at your full retirement age, but they don’t become available until your spouse starts getting their retirement checks. This can mean you need to wait longer to claim your spousal benefits if you want your higher-earning partner to delay their own retirement benefits claim to max out the larger benefit. 

Survivor benefits can also be valuable, and they are available if your spouse passes away. The last surviving spouse gets to keep the higher of the two benefits received by either partner, so the higher earner doesn’t want to shrink their payment with an early claim as doing so would leave their widow(er) with less. 

A financial advisor can help married couples to make a strategic claim based on their respective earning history and things like the ages and life expectancy of each spouse. It’s also worth noting that these benefits may be available even after divorce as long as your marriage lasted a decade or longer. 

The good news is, now you can avoid these devastating Social Security mistakes and ensure you make the right claiming choices that set you — and your spouse — up for the secure retirement you deserve. 

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