3 Ways Americans Accidentally Leave Social Security Money Behind on The Table

For many people, Social Security eventually becomes a crucial part of their retirement income. And after working and paying into the system for decades, you deserve the largest checks you can get.

But certain slip-ups on your part could leave you with less Social Security than you might otherwise receive. Here are a few ways you may be leaving Social Security money behind without even realizing it.

1. Filing for benefits early

When you hear that Social Security benefits are available starting at age 62, your initial reaction might be to file right away. What you may not realize is that claiming at 62 could result in a 30% reduction to your monthly benefits compared to waiting until full retirement age (FRA), which is 67 if you were born in 1960 or later.

Now in some cases, an early Social Security claim can lead to more lifetime income despite resulting in smaller individual checks. If you have health problems and don’t anticipate living a long life, filing for benefits early could result in more total Social Security income because you start getting paid sooner.

But before you claim Social Security at 62, think about what it means for your monthly income and cash flow. And if you decide to file early, make sure there’s a reason for it, and that you aren’t simply acting impulsively.

2. Delaying a spousal benefit claim

Spousal benefits can serve as a key source of income for retirees who don’t have enough of a work history to qualify for Social Security on their own. If you’re married (or an eligible divorcee), you may be entitled to spousal benefits from Social Security that are equal to up to 50% of the benefit your spouse (or ex-spouse) gets at their FRA.

But one thing you don’t want to do is delay a spousal benefit claim. When you’re filing for Social Security based on your own earnings record, your benefits get to grow 8% for each year you wait past FRA, up until age 70.

Those delayed retirement credits do not apply to spousal benefits, however. If you wait beyond your FRA to claim spousal benefits, you could lose out on money you were otherwise entitled to.

3. Not checking your earnings records

Social Security doesn’t pay all retirees the same benefit. The amount you’re eligible for each month hinges on your specific earnings history.

This means that if there’s a mistake on your earnings record, it could result in smaller Social Security checks for life. So it’s very important to check and make sure that the Social Security Administration (SSA) has the right information for you on record.

To do that, go to its website and create an account. This will allow you to access your earnings statements, which are a summary of your wages through the years. Review those for accuracy, and if you spot an error, contact the SSA to fix it.

You may end up needing Social Security to cover a large chunk of your retirement expenses. So it’s important to get all of the money you’re entitled to. To avoid losing out, think carefully before claiming benefits early, know the rules on claiming spousal benefits, and check up on the data the SSA has on record to make sure your earnings are not underreported.

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