7 Social Security Mistakes & How to Avoid Them

Claiming at 62 vs. 67 vs. 70

One of the most common questions retirees ask is whether they should claim Social Security as soon as they’re eligible or delay benefits as long as possible. The answer depends on much more than age.

Assume your full retirement age benefit is $3,000 per month.

Waiting to claim isn’t automatically better, nor is claiming early automatically a mistake. Health, other retirement assets, income needs, and family circumstances all matter when deciding which option makes the most sense.

For married couples in particular, the decision affects more than one person. Delaying benefits may provide additional protection for a surviving spouse if the higher earner passes away first.

In other words, taking a smaller benefit early will keep you from receiving a larger benefit later. The breakeven age depends on certain assumptions made (like inflation and real return), but typically occurs around 78-79 when comparing filing at 62 vs. FRA. This means that if you live beyond age 79, it would better to delay benefits vs. starting at age 62.

While nobody knows exactly how long we’ll live, it’s important to note that the average life expectancy of a 65-year-old male is around 84.1 years old, and it’s 86.6 for a 65-year-old female.

Taking Benefits Early Can Trigger the Earnings Test

Another reason to avoid taking benefits early is because of something known as the earnings test. For those that start receiving benefits while still working and prior to FRA, the earnings test causes $1 in benefits to be withheld for every $2 earned over $24,480 (in 2026).

In the year you hit your FRA, the earnings test becomes a bit more friendly, with $1 of benefits being withheld for every $3 earned over $65,160 (in 2026). Either way, once you hit your full retirement age, the earnings test will away and your benefits will be automatically adjusted.

It’s important to note that a reduction in benefits is different than taxation of benefits. The earnings test is a pure reduction in benefits. Any benefits withheld because of the earnings test are not set aside for taxes but are simply not paid out.

Will Social Security Be Taxed?

Many retirees are surprised to learn that Social Security benefits may be taxable at the federal level.

Depending on your combined income, up to 85% of your Social Security benefits may be included in taxable income. Combined income generally includes adjusted gross income, tax-exempt interest, and one-half of your Social Security benefits.

Because Social Security interacts with IRA withdrawals, Roth conversions, pensions, investment income, and required minimum distributions, the timing and amount of retirement income taken from different accounts can affect how much of your Social Security benefit becomes taxable.

Looking at Social Security as part of a broader retirement income strategy often provides a more complete picture than evaluating claiming age alone.

Taking Benefits Early in Fear of Insolvency Issues

Despite the drawbacks, some may still decide to start benefits early due to concerns over future insolvency of the program. However, these fears may be ill-founded.

According to the Social Security Administration’s 2026 Trustees Report, the combined OASDI trust fund currently holds around $2.56 trillion. Costs have exceeded the program’s income since 2021, and, barring any major changes, the retirement-only portion of the trust fund (OASI) is projected to be depleted in late 2032, with the combined OASDI trust fund holding out until 2034.

While this is something that should be addressed, it’s still a far cry from Social Security going “belly up.” Social Security is a pay-as-you-go system, and even if the trust fund is depleted, income for the Social Security program will not stop.

If no changes are made to Social Security, ongoing payroll tax income after depletion is estimated to cover roughly 78% to 83% of promised benefits, depending on whether the retirement and disability funds are considered separately or combined. This assumes no changes are made to the Social Security system between now and then. On the bright side, there are actually many options to fix the system.

What’s the takeaway? It may not be wise to take benefits early because of concerns surrounding Social Security insolvency issues.

3.  Not Coordinating Benefits for Married Couples

Deciding what filing strategy is best for a married couple can be more complex. First off, you need to understand how benefits are treated for working and non-working spouses.

In short, a low-earning or non-working spouse is entitled to 50% of the higher-earning spouse’s PIA (as long as the working spouse has filed for benefits). If the low-earning spouse collects a benefit based on the working spouse’s earnings record, it’s known as a spousal benefit.

In the case where both spouses had similar income, it can be common for both to retire at a similar time and start Social Security benefits at a similar time as well. However, there can be major benefits to allowing at least one benefit to delay until 70. Doing so can provide added protection to one or both spouses living beyond a normal life expectancy.

Also, once the first spouse passes away, the surviving spouse is entitled to receive the higher of the two benefits (this is called a survivor benefit). If a married couple lets the higher benefit delay until 70, the surviving spouse will receive the higher benefit amount in the form of a survivor benefit. With proper planning, this survivor benefit could be much higher than the previous benefit.

Filing a Restricted Application

For couples with at least one spouse born before January 2, 1954, there may be an opportunity to implement a highly beneficial strategy known as a filing a “restricted application.” A restricted application allows an individual who is eligible for both a spousal benefit and working benefit to choose which benefit they’d like to start receiving, instead of being forced to receive the highest benefit right away (which is the current rule).

In other words, one could start receiving a spousal benefit while their working benefit continues to delay and increase. This allows one spouse to switch benefits at a later date. This is something no longer allowed for anyone born after January 2, 1954.

4.  Not Maximizing Survivor Benefits

Unlike other types of benefits, survivors can begin receiving a survivor benefit as early as age 60, but it would be at a reduced rate. As mentioned above, a survivor benefit is equal to 100% of the deceased spouse’s benefit, including delayed credits. Therefore, maximizing survivor benefits starts with delaying the higher earning spouse’s benefit as long as possible. But, the opportunities to increase survivor benefits don’t stop there.

Survivors also have the unique opportunity to switch from a working benefit to a survivor benefit, and vice versa.

For example, in the case where your own working benefit is less than your survivor benefit, you can begin receiving your own working benefit at age 62 and switch to your survivor benefit at FRA, allowing your survivor benefit to earn delayed credits until that time.

On the other hand, if your working benefit is higher than your survivor benefit, you can begin receiving a survivor benefit at age 60 and allow your working benefit to earn delayed credits to age 70, and then switch to your own increased benefit.

It’s important to note that remarriage before age 60 negates these survivor benefits, unless that marriage ends.

Survivor Benefits Are Often Overlooked

Many people think of Social Security as an individual benefit, but it can also be an important source of income protection for a surviving spouse.

When one spouse dies, the surviving spouse generally keeps the larger of the two Social Security benefits rather than receiving both payments. Because of this, the claiming decision made today can affect household income decades into the future.

Consider a married couple where one spouse receives $2,300 per month and the other receives $3,800 per month. If the higher-earning spouse dies first, the surviving spouse may continue receiving the larger benefit amount. Delaying benefits may not simply increase retirement income during both spouses’ lifetimes. It can also increase survivor income later in retirement.

For some households, maximizing the higher earner’s benefit is as much a survivor planning decision as it is a retirement income decision.

5.  Not Maximizing Divorced Benefits

The same rules that apply for spousal benefits also apply to divorced individuals, provided that the applicant is 62, was married for at least 10 years to the ex-spouse, and is currently unmarried.

Unlike in the case of a married couple, your ex-spouse does not need to have filed for benefits for you to receive divorced spousal benefits (as long as your divorce occurred more than two years ago).

Also, your filing decision does not affect the benefits of your ex-spouse, nor will your ex-spouse’s filing decision affect your benefits. If your ex-spouse remarries, his/her current spouse’s benefits will also not be impacted by your filing decision.

If your ex-spouse passes away, normal survivor benefits could also apply, meaning you could be eligible to begin receiving your ex-spouse’s full benefit.

Of course, there are even more considerations if you remarry. If your second marriage also lasts at least ten years, but then ends in death or divorce, you could be eligible for spousal and survivor benefits off both marriages.

If you have ever been divorced, widowed, or both, you may have options to maximize your Social Security benefits that you haven’t previously considered. Be sure to speak with an advisor who is well-versed in Social Security benefits to help you potentially uncover unused benefits.

Divorced Individuals May Have Additional Claiming Options

Divorce doesn’t necessarily eliminate your ability to receive Social Security benefits based on a former spouse’s earnings record.

Generally speaking, divorced spouses may qualify if:

• The marriage lasted at least ten years,
• They are currently unmarried,
• They are aged 62 or older, and
• The former spouse qualifies for retirement benefits.

Claiming divorced spouse benefits does not reduce your former spouse’s benefits and, in many situations, your former spouse will never know you filed.

Survivor benefits for divorced spouses follow different rules and may provide additional planning opportunities following the death of a former spouse.

6.  Relying on the Social Security Administration for Advice

Unfortunately, due to the complexity of the Social Security system, even the Social Security Administration itself has struggled to provide consistent information on a case-by-case basis. In fact, Laurence Kotlikoff, a professor of economics at Boston University, was quoted in a CNBC.com article saying, “Half of the answers Social Security is giving people are wrong or misleading.”

Furthermore, an article from MoneyTips.com states that SSA employees are not allowed to give you advice on when or how to claim your benefits, but they are supposed to give you the advantages and disadvantages of filing strategies.

The article goes on to state that an audit performed by the Office of the Inspector General highlighted at least one area where the SSA has not provided the full picture to retirees, causing significant underpayment of benefits.

Social Security is a crucial part of retirement and your decision could be irrevocable. The OIG report implies that you can’t always trust the SSA to give you the right information. It’s best to do your own research so you know the right questions to ask the Social Security Administration.

7.  Thinking all Social Security Decisions are Irrevocable

Some Social Security decisions are irrevocable, but not all. In fact, if you change your mind about starting your benefits, you can cancel your application up to 12 months after you became entitled to retirement benefits. This process is called a withdrawal.

However, it may not be as easy as just stopping your benefits. If anyone is receiving benefits based on your application, they must consent in writing to the withdrawal. You also must repay all the benefits you have received, including your benefit, withholdings for Medicare premiums, tax withholding, etc.

While a withdrawal is not an option if you have been receiving benefits for longer than 12 months, there is another strategy called “file and suspend” that could help improve your benefits. File and suspend essentially does what it sounds like for those between FRA and age 70. You can suspend your benefit for the purpose of accruing delayed credits until a later age (max age 70).

Why would someone choose to file and suspend? Some may decide to retire, but then go back to work unexpectedly, not needing the income from Social Security.

For example, Bob retires at age 65 and begins receiving benefits. However, Bob accepts an opportunity for a consulting job when he is 65 years old. After accepting his new position, his consulting income is all he needs to cover his living expenses. In this case, Bob could suspend his benefit so that he earns delayed retirement credits, resulting in a higher benefit in the future.

Medicare and Social Security

In many cases, and especially for those over age 65, Medicare premiums are withheld from Social Security benefit checks. If you decide to withdraw or suspend your Social Security benefit, you’ll need to be sure that your Medicare premiums are still being paid on time, so your coverage is not interrupted.

If you are withdrawing your Social Security application, you may also have the option to withdraw your Medicare coverage. However, this is a serious decision and should be taken very seriously. Withdrawing your Medicare coverage means that you must repay all Medicare Part A benefits paid on your behalf and if you file for Social Security and Medicare later, your Part B premiums may be higher due to your late enrollment.

If you are thinking about terminating your Medicare coverage, it is recommended that you have a personal interview with the Social Security Administration to get all the facts. You should also consider talking with a Medicare insurance specialist to ensure you have all the facts.

FAQs

1. Is it better to claim Social Security at 62, 67, or 70?

There isn’t one age that’s right for everyone. Health, retirement savings, taxes, life expectancy, and family circumstances should all be part of the decision.

2. Can I collect Social Security based on my ex-spouse’s record?

Possibly. Individuals who were married for at least 10 years and meet certain requirements may qualify for divorced spouse benefits.

3. Will Social Security benefits be taxed?

They can be. Depending on your income, up to 85% of your Social Security benefits may be subject to federal income tax.

4. What happens to Social Security when my spouse dies?

In many situations, the surviving spouse keeps the larger of the two Social Security benefits. Because of this, claiming decisions can affect both spouses throughout retirement.

5. Should married couples coordinate their Social Security decisions?

Absolutely. Social Security is often one of the largest sources of guaranteed retirement income available, and coordinating benefits may significantly affect lifetime household income.

6. Does Social Security affect Roth conversion planning?

It can. The timing of Social Security benefits may influence taxable income and create opportunities for Roth conversions before benefits begin or before required minimum distributions increase taxable income.

Social Security Should Coordinate With the Rest of Your Retirement Plan

Social Security decisions don’t happen in isolation. The timing of your benefits can affect how aggressively you spend retirement assets, whether Roth conversions make sense before claiming benefits, and how much income may remain available for heirs later.

Delaying Social Security, for example, may allow retirees to spend down portions of pre-tax retirement accounts earlier in retirement or complete Roth conversions during lower-income years. In other situations, claiming earlier may preserve investment assets that eventually become part of an estate plan.

The goal isn’t necessarily to maximize Social Security benefits in every situation. It’s understanding how Social Security fits alongside taxes, retirement spending, charitable goals, and the legacy you hope to leave behind.

How Social Security Coordinates With Your Estate Plan

Unlike an IRA, 401(k), or investment account, Social Security itself isn’t an asset that passes to your heirs. Aside from spousal and survivor benefits, there’s no lump sum or account balance left behind for children or other non-spouse beneficiaries. That makes it easy to overlook Social Security when thinking about estate planning, but the claiming decision still has a real effect on what you eventually leave behind.

Every dollar of Social Security income you receive is a dollar you don’t need to withdraw from other accounts. Retirees who claim earlier often rely more heavily on Social Security for living expenses, which can allow IRAs, 401(k)s, and taxable investment accounts to continue growing untouched. Retirees who delay claiming, on the other hand, typically draw down more from those same accounts in the years before benefits start. Either approach can be reasonable, but it’s worth recognizing that your claiming age indirectly shapes the size of the accounts your heirs may eventually inherit.

This is also a good opportunity to make sure Social Security decisions aren’t made in a vacuum from the rest of your estate plan. Beneficiary designations on retirement accounts, the instructions in a will or trust, and the assets you’re counting on to fund a legacy should all be reviewed together, rather than treating Social Security, taxes, and estate planning as separate conversations.

Bottom Line

Social Security is not always as straightforward as some think and I’m consistently surprised by the lack of planning that goes into this major decision. The difference in cumulative lifetime benefits between some strategies could amount to hundreds of thousands of dollars.

Picking the best strategy is not always easy and usually depends largely on how long you live. However, with proper planning and knowledge of your options, you can make a more informed Social Security decision.

If you haven’t received a Social Security analysis for your specific situation, talk with a retirement specialist or CERTIFIED FINANCIAL PLANNER™ professional to learn about your options.