Social Security Mistakes to Avoid

1.    Fail to Work for At Least 35 Years – Social Security is based on your highest 35 years of earnings history. If you have less than 35 years of earnings, the non-working years will be counted as “0”, dropping your benefits. Working in retirement is one of the best ways to increase your Social Security benefits, especially for married couples. Each additional year of current earnings form work will replace a lower earning year and will increase your (and potentially your spouse’s) Social Security. 


2.    Fail to Coordinate Benefits with Your Spouse – All too often couples focus only on their own Social Security benefit and fail to realize that they may be eligible for a spousal benefit, which can be up to 50% of their spouses benefit while they wait to claim their own. 


3.    Claim Too Early – One of the biggest mistakes most Americans make. Many believe that Social Security is an “automatic” benefit: you turn 62, collect and don’t think about it again. However, if your full retirement age is 66 and you take the benefit at 62, you are not maximizing on what your monthly benefit would be.


4.    Earn Too Much While Collecting – In 2015, if you earned more than $15,720 while collecting caused the Social Security Administrations to withhold $1 for every $2 in earning over the Earnings Limit.


5.    Not Fixing Errors in Your Social Security Earnings Records – Your income is captured by the Social Security database and could contain some errors. As a result, you should regularly check and make sure the earnings information is correct. You have 3 years, 3 months and 15 days to correct any errors. 


6.    Ignoring the Impact of Taxes – Your Social Security benefits are taxable. Keeping your taxable retirement income below certain thresholds could allow you to avoid paying tax on your Social Security benefit. 

Keep these blunders in mind when you reach the point in your life when it is time to sit down and plan your retirement and Social Security benefits.


Raymond C. Lantz, Jr. is the president and founder of USA Wealth     Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with  Ray Lantz on WBSM 1420AM or on the Radio Pup app.