Here Are Three Social Security Mistakes You May Be Making Without Even Realizing It.

Social Security’s benefits system is more complex than you may realize, so there’s a considerable risk you’ll make mistakes that reduce your retirement income. In reality, there are three major mistakes you might be making right now that could cause you significant financial troubles in the future.

Could these mistakes cost you money without your knowledge?

To prevent struggling as a senior owing to Social Security issues, here are three frequent errors you may not even be aware of committing but you should avoid making them.

#1 Not keeping track of your earnings history.

The amount of money you are entitled to receive when applying for Social Security benefits is largely determined by your lifetime earnings. Specifically, the Social Security Administration adjusts wages received over time to account for salary growth and then determines your average monthly wage using data from the 35 highest-earning years. Your benefits are proportional to your average monthly wages.

Throughout your career, you should routinely review your earnings record to ensure that any income subject to Social Security tax has been accurately recorded. Not doing so is a mistake, as it is simpler to repair errors quickly after they are committed, as opposed to decades later, when documents proving your earnings may have been destroyed. Each year, you may go to mySocialSecurity to review this record and call Social Security if there is a problem.

#2 Setting unrealistic timeframes for claiming Social Security benefits

Many individuals intend to delay claiming Social Security as long as possible, with some estimating they will wait until age 70. This appears to be a reasonable plan, given that the longer you wait to get your first check after being eligible at age 62, the greater your monthly payment will be until age 70 when payments cannot rise.

The difficulty is that things may not go as planned. If your health or family obligations prohibit you from continuing to work, or if you cannot find suitable employment later in life, you may be pushed into early retirement and be required to rely on Social Security as one of your sources of income sooner than you had anticipated.

If you are forced to begin receiving benefits earlier than planned, you may be left with lower monthly payments that might wreak havoc on your retirement budget. Do not assume that everything will go smoothly and that you will be able to wait. Plan your retirement based on the idea that you will begin receiving Social Security benefits early; if you can wait longer, consider the additional monthly income a bonus.

#3 Believing that Social Security will generate a larger income than it will

The final fundamental error many individuals make is believing that Social Security will give them far more for them than it will. Your retirement benefits are intended to be one of several sources of financial assistance throughout your senior years, with your savings and maybe a workplace pension. They cannot be your sole support system.

While Social Security is meant to supplement other sources of income, payments replace only around 40% of pre-retirement income. This is insufficient for the majority of individuals. Thus it’s crucial to determine your potential benefit amount. Then you may devise a plan to save enough to complement that money and give you the comfortable retirement you deserve.