An increasingly large number of Baby Boomers are entering retirement without sufficient savings, making them almost entirely reliant on Social Security to get through retirement.
If you are a Baby Boomer who has managed to build up a healthy retirement fund over the course of your working life, Social Security is still a good way to top up your income in retirement to allow you to have a better standard of living in your later years.
There are several different factors that determine how much you’ll be eligible to receive in Social Security payments and there are a few important mistakes which you should avoid to ensure that you don’t leave much-needed money on the table.
Read on to discover three important Social Security mistakes to avoid as you approach retirement.
Claiming Too Early
Baby Boomers can start receiving Social Security payments once they turn 62, though the full age of retirement is 66 or 67 (depending on what year you were born.)
Many of us like to begin claiming Social Security as soon as it’s possible to do so, but it’s important to realize that this can greatly reduce the total amount of money you’ll receive over the course of your retirement (though this isn’t always the case.)
This is due to the fact that claiming Social Security payments too early will reduce the monthly payments you receive by roughly 25 to 30 percent.
Therefore, if you’re able to get by with your own savings or other means, it is advisable to wait a few years until you start claiming Social Security payments, as this will put you in a much stronger position later on in your retirement.
Waiting Too Long Before Claiming Social Security
Waiting too long before you start claiming social security payments is another potential mistake to be aware of, as it can also result in you missing out on a significant amount of Social Security funds.
While it’s true that waiting a few years until you start claiming Social Security benefits will result in you receiving a larger monthly paycheck, you can still end up receiving less money over the course of your retirement in certain circumstances.
For example, if you have a disease that significantly lowers your life expectancy, it is usually best to start claiming Social Security as soon as possible, even if the monthly payments will be lower this way.
Claiming Less Than What You’re Entitled to
As you approach retirement, it’s important to remember that you won’t automatically be notified by the government if you’re eligible to receive additional Social Security benefits.
So, it’s important to check your eligibility yourself and apply for additional Social Security payments if you qualify.
In addition to the basic retirement benefits, some of the other Social Security benefits which you may be entitled to include spousal benefits, divorce benefits, and survivors’ benefits.
A Quick Summary
- Many Americans enter retirement with very little savings, so they are almost entirely reliant on their Social Security benefits to get by.
- Even if you do have a healthy retirement fund, Social Security payments can be a good way to top up your monthly income in retirement.
- There are a few important mistakes which you should avoid to ensure you are maximizing your Social Security payments.
- Common mistakes made by seniors include claiming too early or claiming too late.
- Also, not checking if you’re entitled to additional Social Security payments for other benefits, such as spousal benefits, can result in you leaving a lot of money on the table.