Figuring out when and how to start collecting Social Security isn’t always as straightforward as it seems. There’s a lot of fine print involved, and missing a few key details can cost retirees a good chunk of money over time.
Here are some of the most common mistakes people make when it comes to their Social Security checks—and how a little planning can help you avoid them.
1. Starting Too Early
A lot of folks jump at the chance to claim benefits as soon as they hit 62. And while that might feel like the right move in the moment, it often leads to smaller checks for the rest of your life.
Christopher Stroup, a financial planner in California, explains that claiming at 62 can cut your monthly payments by 25% to 30% compared to waiting until your full retirement age. So unless you absolutely need the money, it might be worth holding off. That doesn’t mean you have to wait all the way until 67, though. You can start anywhere between 62 and your full retirement age. The longer you wait, the bigger your check—up to a point.
2. Misunderstanding the Wait Time
Another thing people often get wrong is the gap between applying and receiving that first payment. Patrick Ray, a senior advisor at Wealth Enhancement Group, says he regularly sees people retire expecting their Social Security money to roll in right away. But it usually takes a few months from the time you apply until you see your first check.
So if you’re planning to stop working in, say, June, you probably want to file in April to avoid any income gap. That kind of timing can make a big difference.
3. Ignoring Spousal Benefits
If you’re married, divorced, or widowed, don’t forget to look into what you’re entitled to through your spouse’s work record. A lot of retirees don’t realize they might be eligible for more through spousal benefits than their own.
Stroup says a spouse can receive up to 50% of their partner’s benefit amount if it’s higher than what they’d get on their own. This can be a helpful boost, especially for couples where one person earned significantly more over their career.
4. Forgetting That Benefits Can Be Taxed
Here’s something that surprises a lot of retirees: Social Security income isn’t always tax-free. Depending on your overall income, anywhere from 15% to 85% of your Social Security benefits could be taxable. Stroup points out that many people don’t factor that into their retirement budget, and it can throw off their whole financial plan.
Ray adds that if you haven’t been withholding taxes—or didn’t withhold enough—you might be in for a shock come tax season. It’s smart to talk to a tax advisor before you start collecting benefits so you’re not caught off guard.
5. Not Coordinating With Retirement Accounts
Some retirees treat Social Security as a bonus check instead of working it into their overall retirement strategy. That can backfire. Ray says people sometimes continue pulling the same amount from their savings or retirement accounts even after they start getting Social Security. But that can lead to overspending or draining your accounts faster than necessary.
Instead, it’s better to adjust your withdrawals based on how much you’re now getting from Social Security. That way, your savings last longer and your monthly income stays steady.
6. Not Having a Plan
When it comes to retirement, winging it just doesn’t work. Ray points out that most mistakes people make come down to a lack of planning. It’s not just about choosing when to take Social Security—it’s about looking at the big picture: income, expenses, taxes, healthcare, and how long your money needs to last.
Surprisingly, nearly three out of four people over 50 don’t have a written financial plan. Without one, you’re basically guessing—and that can get expensive fast.
7. Assuming You’ll Have More Money in Retirement
Some people think retirement means more freedom—and more spending money. But that’s not always the case. Ray often sees retirees who overestimate how much they’ll have to spend, especially with Social Security factored in. The truth is, if you’re not doing proper budgeting and forecasting, you might find out too late that your lifestyle isn’t sustainable on the income you expected. Planning ahead with detailed projections helps you stay realistic and avoid unpleasant surprises.
8. Not Considering How Long You’ll Live
A lot of retirees focus on the next few years, not the next few decades. That’s a risky mindset. Even if most men in your family didn’t live past 75, you shouldn’t just assume you’ll follow the same path. It’s important to plan for the chance you might live well into your 80s or 90s—because if you do, and you didn’t plan for it, you could outlive your money. Running a few different scenarios with a financial planner can help you prepare for both the expected and the unexpected.
Social Security might seem like a simple monthly check, but there’s a lot riding on when and how you choose to claim it. The good news? Most of these common missteps can be avoided with a bit of foresight and the right advice. Whether you’re a few years away from retirement or it’s just around the corner, take the time to make a plan. Talk to a financial expert if you’re unsure. Getting it right from the start can make a huge difference down the road.
