After decades of arduous labor, Social Security is meant to provide retirees with a sense of financial stability. However, it falls short of giving many people the pleasant retirement they had hoped for. The choices retirees make about their benefits are a crucial aspect, even though low payouts and growing living expenses also play a part.
Unknowingly, a lot of retirees are making blunders that lower or overstretch their Social Security income. These errors may result in needless financial difficulties. Here are five typical mistakes you should avoid to safeguard your financial future, whether you’re already receiving benefits or are nearing retirement.
1. Claiming Benefits Too Early
Claiming Social Security payments as soon as they become eligible at age 62 is one of the largest blunders made by retirees. Although it may be tempting to begin collecting payments immediately, doing so will drastically lower your lifetime monthly benefit.
Your monthly income rises by a specific percentage for each year you postpone receiving Social Security until you are 70 years old. You may be locked into permanently reduced payments, often by as much as 30%, if you make your claim early. That cut might be the difference between financial stability and financial hardship for retirees on a fixed income.
Delaying your claim, if at all possible, increases your monthly income and provides you with a larger safety net against inflation and unforeseen costs in later life.
2. Not Understanding the Impact of Working While Receiving Benefits
Some retirees believe that working part-time will allow them to readily supplement their Social Security income. Even though working while you’re retired can be financially advantageous, it’s crucial to know how filing for benefits before you reach full retirement age can impact your benefits.
Your Social Security benefits could be lowered if your income exceeds a specific threshold. Early cutbacks might cause temporary financial hardship and confusion, even though the Social Security Administration will eventually adjust your payment once you reach full retirement age.
Many retirees end themselves with lower incomes than they expected because they failed to account for this adjustment. Make sure you comprehend the earning caps and how your income may temporarily affect your Social Security benefits before going up to work in retirement.
Did you know 74% of people approaching retirement are missing critical information that could cost them years of freedom and happiness?
I’ve personally analyzed hundreds of retirement plans over the years and discovered a pattern which absolutely shocks me: so many times, I find…
— Gabriel Gallante (@RocklineWealth) April 22, 2025
3. Ignoring Spousal and Survivor Benefits
Ignoring the spouse and survivor benefits that Social Security offers is another expensive error. Many widowed people and married couples are unaware that they may qualify for extra assistance. Even if they have never worked, spouses may be eligible to receive up to 50% of their partner’s benefits. Based on their departed spouse’s record, widows and widowers may be eligible for survivor benefits, which frequently enables them to transfer to a larger monthly income.
Every year, hundreds or even thousands of dollars may be lost if these advantages are not investigated and claimed. You may increase your income and achieve much-needed financial stability by being aware of all of your possibilities.
4. Mismanaging Other Retirement Income Sources
The goal of Social Security was never to be the only source of income for retirees. However, a lot of people handle it that way, frequently as a result of inadequate planning for integrating Social Security with other investments, pensions, or savings. Retirees risk exhausting other assets too rapidly or incurring greater taxes than necessary if they don’t have a defined exit strategy.
Financial strain can increase as a result of poor retirement plan management, particularly when medical costs increase with age. Social Security must be incorporated into a larger retirement income plan as part of prudent financial planning. You may make sure that your savings and benefits complement one another to support a long-term, sustainable retirement by consulting with a financial advisor.
Social Security is often sold as a safety net for retirees, but dig deeper, and it starts looking like a shaky deal.
The system takes a chunk of your paycheck—12.4% split between you and your employer—promising future benefits.
Yet, the math doesn’t add up. With an aging… pic.twitter.com/bPSwydTm1M
— Erica 🇺🇸🇺🇸🇺🇸 (@EricaRN4USA) April 8, 2025
5. Failing to Plan for Longevity
A lot of retirees misjudge their true lifespan. Even if considering longevity risk is unpleasant, the possibility that you will outlive your money is a serious worry. Retirees run the risk of running out of money in their 80s or 90s if they base their retirement income on an average life expectancy rather than a more conservative estimate.
Making decisions that optimize Social Security’s value is essential because it’s frequently the only lifetime guaranteed income source. Retirees can prevent poverty later in life by considering the long term when deciding when to collect benefits, how to manage resources, and how to budget for medical expenses.
