Don’t Make These Mistakes with Your Social Security Benefits


Published by Taylor Financial Group

The nuances of Social Security benefits can make it difficult to understand what you’re entitled to.  Indeed, for a married couple, there are over 8,000 combinations of benefits.  Too many Americans miss out on collecting thousands of dollars in benefits simply because they are confused or not properly informed.  This issue was highlighted recently, when the Office of the Inspector General released a report revealing that the Social Security Administration (SSA) failed to notify nearly 10,000 widow and widower beneficiaries age 70+ that they could receive more benefits after their spouse passed away by suspending their own benefits and taking the survival benefits for their deceased spouse instead.  This “mistake” amounted to a total underpayment of about $131.8 million.  That’s a lot of money!

There are many factors that get overlooked when it comes to Social Security benefits.  We don’t want you to make avoidable mistakes (or fall victim to the mistakes of the SSA).  So, here are the most prevalent Social Security mistakes that you should be aware of, keeping in mind that everyone’s situation is unique.

Don’t Seek the Wrong Guidance

It’s not entirely the SSA’s fault that people are not properly informed.  The fact is that SSA employees aren’t authorized to give you information that might be interpreted as “advice.”  If you’ve called the SSA to get answers to some of your questions, you’ve probably hung up the phone feeling frustrated and confused.  Don’t rely on the SSA only.  We help our clients with Social Security matters all the time because we know the different ways to maximize your benefits depending on your situation.  Be sure to call us if you’re not sure what to do.

Don’t Start Taking Benefits Until You Understand Your Options

Filing for Social Security benefits should be done thoughtfully.  There are so many elements that could affect how much you receive.  Making the decision to collect too early could cause you to lose a lot of money!  For instance, if you were born after 1960, your full-retirement age is 67.  However, you are allowed to file for benefits as early as age 62.  Collecting five years earlier than full retirement would cut your total benefits by 30%.  On the contrary, you’re also allowed to delay your benefits to age 70, which is important to know because for every year you delay collecting benefits, you could earn up to 8% per year.  Keep in mind that the benefits of delaying stop after age 70, so there’s no sense in delaying any longer than that.

Avoid Identity Theft by Confirming Your Benefits

Believe it or not, monitoring your Social Security benefits can be an effective tool for protecting yourself against identity theft.  For instance, don’t assume that a missed Social Security payment is just an SSA mistake.  This could be a sign of identity theft and you should take swift action, especially because the process of fixing identity theft can be a tedious and lengthy one.  The sooner you start the process the less harmful the identity theft will be on your life.

We take identity theft very seriously and are constantly advising our clients on how to be prudent about protecting themselves.  In fact, our Monthly Planning Letter last month was all about identity protection – click here to read it for some helpful tips.

Individual Benefits vs. Spousal Benefits

As we’ve mentioned, knowing the differences between individual and spousal benefits is extremely important.  Though we highlighted the issue with widows and widowers above, spousal benefits are available in the case of living spouses too.  For instance, if you’re earning a higher income than your spouse, you could suspend your benefits until age 70 to maximize your Social Security benefits (up to 8% more per year), while your spouse begins taking his benefits at the normal time.  In the end, you’re giving yourselves the most income possible.  In short, couples should approach Social Security as a team, and not as individuals.

We know it’s all tricky to understand, which is why we urge you to call us if you’re not sure which option is most beneficial for you.  After all, maximizing your Social Security benefits can be a huge help in retirement.

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