When you reach the finish line of a long, arduous working career, retirement is a welcome respite — and finally, time to start taking advantage of those Social Security benefits you’ve been paying into for decades.
Many people think Social Security is the end-all be-all of retirement planning — and that line of thinking can really cost you.
1. Not Checking Your Earnings Record
Social Security is a massive undertaking — and you’re just one person out of the millions they service every year. First things first, view Social Security like you’d view your paycheck: Carefully. This habit can start before you ever even collect on those benefits, so make sure you check that every year’s earnings record is squared away so you can get credit where it’s due.
2. Not Working Long Enough
They say it takes time to build time, and that adage is true when it comes to building up Social Security benefits. It seems 35 is the magic number to ensure you get your full benefits, so if you haven’t worked for 35 years — or haven’t worked a job that paid into Social Security — expect a big zero to get averaged in for each year you’re missing.
3. Taking Social Security Too Early
Patience is a virtue — and that applies to Social Security, too. Although you realistically can start pulling on those benefits once you hit your 62nd birthday, good things come to those who wait. For everyone born after 1959, if you start pulling on them early you’ll see them reduced by 30 percent — permanently.
4. Not Coordinating Benefits With Your Spouse
Marriage is all about teamwork, and that attitude applies to Social Security as well. If you’re married, be sure to coordinate with your spouse to make sure you’re both maximizing your combined benefits to get the most for your money.
5. Not Proactively Planning for Taxes
This one is simple: A little forward thinking goes a long way. Take some time over the years to engage in a little tax planning, because nobody wants to pay the IRS any more of their Social Security benefits than they have to.