8 Social Security Mistakes Gen X Needs To Avoid
Written by
Choncé Maddox
Edited by
Zuri Anderson
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As Generation X edges closer to retirement, Social Security decisions are becoming more relevant, and possibly more complicated. The choices you make in your 40s and 50s can dramatically affect how much income you’ll receive later.
From claiming benefits too early to ignoring tax implications, there are several avoidable mistakes that could shrink your monthly check or leave you financially unprepared.
Here are the biggest Social Security pitfalls Gen Xers should avoid, according to financial experts, planners and attorneys.
1. Claiming Too Early Without Running the Numbers
For many Gen Xers, taking Social Security at 62 seems like the default move. But experts warn that this could lock you into lower benefits for life.
“Claiming at 62 might feel like a head start, but it’s often a long-term budget killer,” said Andrew Latham, certified financial planner (CFP) at SuperMoney. “You lock in a permanent reduction, up to 30% less than your full benefit.”
While early claiming may be necessary in some situations, such as poor health or lack of income, Dr. Shawn DuBravac, CEO and president of the Avrio Institute, emphasizes the long game: “Filing too early can put unnecessary pressure on your financial future,” especially with longer life expectancies and the potential for a 30-year retirement.
2. Overlooking How Work Affects Your Benefits
Many Gen Xers plan to work part-time or consult in early retirement. But if you collect Social Security before your full retirement age, those earnings could reduce your benefits.
“If you’re under full retirement age, Social Security deducts $1 from your benefits for every $2 you earn above a certain limit,” said Ashley Morgan, attorney, tax resolution expert and founder of Ashley F Morgan Law. “In 2025, that limit is $23,400.”
In short: Working while claiming can create a lose-lose situation unless you’re strategic. Even self-employment income can come back to bite if you don’t track and report it correctly.
3. Assuming Social Security Alone Will Be Enough
A surprisingly common misstep? Relying solely on Social Security to cover your retirement.
“Another common misstep is assuming Social Security benefits alone will be enough. It likely won’t be,” said Dr. DuBravac. “Delaying benefits and building diversified income streams through other retirement like IRAs or [401k plans] can lead to significantly greater financial stability down the road.”
William Connor, certified financial advisor (CFA,) CFP and partner at Sax Wealth Advisors agreed: “Social Security should be viewed as one piece of a multi-pronged approach to retirement income.”
4. Not Checking Your Earnings Record or Credits
Social Security benefits are calculated based on your 35 highest-earning years. If there are mistakes or gaps in your earnings history, your future checks could take a hit.
“Gen Xers should create an account with the Social Security Administration and review your earnings history,” said Connor. “Inaccurate records can lead to reduced benefits.”
Ashley Morgan echoed this: “Previously, the SSA mailed out earning reports. Now, you have to go online and check yourself. Getting errors fixed is much easier sooner than later.”
5. Being Self-Employed and Not Reporting Income Properly
If you’re self-employed and routinely deduct business expenses to lower your tax bill, you may also be shrinking your future Social Security benefits without realizing it.
“Your Social Security benefit is based on your taxable income,” said Morgan. “So writing off too much may reduce the income you’re reporting to the SSA, and thus, your future payout.”
Worse, if you don’t report that income within three years, you may not get Social Security credit for it at all.
6. Ignoring Spousal and Survivor Benefits
Whether you’ve been married, divorced or widowed, spousal and survivor benefits can be a lifeline. But many Gen Xers don’t realize they’re eligible.
“Generally, if your spouse is fully retired and you’ve reached full retirement age, you may qualify to collect half of their benefit or the full amount as a survivor,” said Morgan. This is especially valuable for stay-at-home parents or those with lower lifetime earnings.
Even divorcees could qualify if the marriage lasted 10 years or more and they haven’t remarried.
7. Assuming Social Security Will Be Gone
With frequent headlines about Social Security’s future, it’s easy to assume the program will be “bankrupt” by the time Gen X retires. But that assumption can lead to poor decisions, like early filing out of fear.
“While Social Security does face long-term funding issues, it seems unlikely that the program will be eliminated,” said Connor. “Gen Xers should plan for a potential reduction — say, 70% of projected benefits — but not assume the entire system will collapse.”
8. Forgetting About Taxes on Benefits
Yes, Social Security income can be taxed both at the federal and possibly state level.
“Up to 85% of your benefits can be taxable if your combined income is above a certain threshold,” said Connor. “High-income Gen Xers need to start thinking now about tax-efficient portfolio withdrawals to reduce the hit.”
Dr. DuBravac also warns that without a coordinated drawdown strategy, you could end up paying more taxes than necessary, especially during your highest-earning years.
Final Thoughts: It’s Not Too Late — But It Is Time
“Many Gen Xers still believe there is considerable time before they need to focus on retirement planning,” said Connor. “But waiting reduces options.”
Now is the time to run scenarios, check your earnings record, coordinate your retirement accounts, and get a Social Security strategy in place that fits your health, lifestyle and income plans. After all, Social Security isn’t just a check. It’s a decision that can impact your financial future for decades.
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