Avoid Making These Social Security Mistakes

For many Americans, Social Security benefits play an essential role in planning for retirement. Many retirees plan to use this form of fixed income to either supplement or cover their expenses throughout their golden years. Regardless of your plan, married and single alike, there are undoubtedly numerous ways to claim these benefits. Unfortunately, there are as many mistakes that quickly add up to a good chunk of change. It’s crucial to avoid these costly Social Security mistakes to avoid losing out on your benefits as you enter retirement.

Not keeping tabs on your earnings record is one of the top mistakes that can take a large chunk of your Social Security benefits. You may be decades from retiring, but the sheer amount of benefits you receive is dependent upon your overall earnings record. When your earnings record is full of errors, you are prone to losing out on your entitled benefits. These mistakes may include employer errors, incorrect amounts, or errors due to a divorce.

Most retirees are well aware of the exact day they qualify to retire, which is 62 years old for many. However, if you were born after 1959, your benefits will be permanently lowered by 30% if you claim Social Security benefits at 62—even after you reach full retirement age (FRA). Depending on your life expectancy, you may not live even to an age where the penalty affects you. For example, those who suffer from severe health conditions could benefit more from claiming benefits at 62, compared to waiting longer to avoid the penalty.

Planning for taxes on your Social Security benefits is another error you should work to avoid making. Nearly 85% of your benefits may be subject to federal income taxes depending on the magnitude of your wages, dividends, and more. Those who file as individuals will have 50% of their benefits taxed if their combined income lands between $25,000 to $34,000. This combined income increases to $32,000 and $44,000 for joint filers, with half of their benefits subject to taxation.

Remarrying is yet another Social Security benefits mistake many retirees tend to make without realizing it. Although divorcees over age 62 qualify to receive a portion of their ex-spouse’s benefits, you only remain entitled as long as you remain unmarried. By getting remarried, you will lose the benefits you may have come to expect, especially if you didn’t work or received a low income. It’s crucial to determine whether or not you risk losing Social Security benefits by getting remarried, so take the time to understand the benefits and risks before moving forward.

Social Security benefits are calculated off of a system involving work credits. Qualifying for said retirement benefits requires a minimum of 40 work credits, and employees are permitted to earn a maximum of 4 credits per year. For example, in 2019, you had to make $1,360 to receive a single credit or $5,440 to receive a maximum of 4. Because your benefits are calculated using your 35 highest-earning years, individuals with less than 35 years of earnings will be penalized with a $0 average for each year you lacked earnings.

Contact Information:
Email: [email protected]
Phone: 7242723902

Bio:
Craig E. Vukich is a 35 year retirement specialist and Financial Advisor who has helped thousands of clients all over the country with their investment portfolios and retirement strategies.
In that time, Craig has also helped seniors and retirees with their Medicare options as healthcare continues to be one of the most confusing issues facing people today.
Personally, Craig lives in Beaver Falls, Pa with his beautiful wife and childhood sweetheart Barb and their lovely daughter Shalyn.
Craig is a graduate of Westminster College which is about an hour north of Pittsburgh. Craig is a recreational golfer and traveler and Pittsburgh sports fanatic.

Disclosure:
This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.