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5 Social Security Mistakes You Probably Do Not Even Realize You're Making – The Motley Fool

We all make mistakes. We made non-financial ones, such as brewing caffeinated coffee in the evening when we were going to brew some decaf, and financial ones, such as not saving and investing enough to build a sufficient war chest for retirement

Another kind of mistake that shortchanges our comfort in retirement is a mistake we make related to Social Security. That's dangerous, since a total of 48% of married elderly Social Security beneficiaries and 69% of unmarried ones get 50% or more of their income from it, according to the Social Security Administration (SSA)

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Here are five Social Security mistakes many people make. You may be making one or more without knowing it.

No. 1: Not setting up a "my Social Security" account

If you have not set up a "My Social Security" account at SSA website, you should – for several reasons. First, it is where you can look up your estimates of your future benefits at any time and see the SSA's record of your income and taxes paid to the Social Security system.

It's also good to set up this account as soon as possible because if you do not, an identity thief might. That's one way that crooks are causing massive headaches for many Americans – posing as they are online and trying to get their Social Security benefits

2: Not checking your earnings history

While you're at your Social Security account, look over that record of your income over your entire working life and see if it looks correct.

It's smart to review the record every now and then so you can spot any possible errors and have them fixed. If the record does not reflect all your earnings, when it comes time to calculate (and pay!) Your benefits, you will get shortchanged

No. 3: Not knowing your "full retirement age"

You should also find out your "full" retirement age. That's the age at which you can start collecting the full benefits to which you're entitled. It's important to know that age because it's likely to be a key part of any Social Security strategizing you can do. The full retirement age

1937 or earlier


Full Year of Retirement Age



65 and 2 months


65 and 4 months


65 and 6 months

10 months




66 and 2 months 19659018 1956 19659017 66 and 4 months 19659018 1957 19659017 66 and 6 months 1958 [19659017] 66 and 8 months


66 and 10 months

1960 and later


Source: Social Security Administration.

No. 4: Planning to start collecting benefits at a suboptimal time

You can make your Social Security benefit checks larger or smaller than what you would get if you started collecting at your full retirement age – by starting to collect earlier or later. For every year beyond your full retirement age, you will increase your value by about 8% – until age 70. So delaying from age 67 to 70 can leave you with checks about 24% fatter. 19659002] That works in reverse if you start collecting early. For every year before your full retirement age, you start collecting, your benefits will shrink by about 7%. So, if your full retirement age is 67 and you start collecting benefits at age 62, your checks will be about 30% smaller.

Many people want to delay as long as they can for those fatter checks but they're not appreciating that while the checks will be larger, there will be far fewer of them. The program is designed so that the total benefits received are about the same no matter when you start collecting, if you have an average life span. Given that, and the fact that few of us know how long we will live, it makes a lot of sense for most people to start collecting at 62.

On the other hand, if your family has featured many people who lived well into their 90s and you can afford to delay starting to collect, it can make sense to do so

It may also be a mistake to start collecting while you're still working – or to take on a job with significant income while you're collecting benefits. Why? If you earn too much, you may have some of your benefits withheld. (That might be annoying, but you get that money later, so it's not a fatal error.) You can even end up with your benefits taxed

No. 5: Not coordinating with your spouse

Finally, if you're married, be sure to coordinate when you start collecting benefits with your spouse. For example, you might start collecting the benefits of the spouse with the lowest lifetime earnings record on time or early, while delaying the benefits of the higher-earning spouse. That way, both of you get some income earlier, and when the higher earner hits 70, they can collect extra-large checks.

Also, should a higher-earning wife die, those bigger benefits checks – as widows and widows can choose to receive 100% of their late husband's benefit instead of their own. (The survivor benefit is not available to those who remarry before age 60, but it is if you are at least 60 and have been married for at least 10 years.)

It's worth learning more about Social Security so you make smart decisions in order to get as much as you can out of the program. After all, you have probably been paying Social Security taxes (that "FICA" deduction on your pay stub) for your entire working life

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