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Three Social Security Claiming Mistakes to Avoid

May 31, 2016

Social Security benefits are complex and confusing for many baby boomers. A recent study found that, among Americans ages 45 to 64, many lacked knowledge around the impact of claiming age, spousal benefits, and more.

Getting Social Security benefits right, however, can mean the difference between a difficult retirement and a secure one. Experts say that baby boomers mapping out their Social Security claiming strategies should work to avoid the following common mistakes:

  • Not filing for a spousal benefit. Say you’ve reached your full retirement age during or before 2019 and your spouse has already filed for benefits. You can build wealth by filing for spousal benefits only at your full retirement age and then waiting until age 70 to collect your own retirement benefits. This way, you’ll collect two benefits in sequence.
  • Quitting work too soon. Some people file at age 62 because they need the income but then quit their jobs because Social Security benefits are reduced if employment income exceeds a certain level. However, any Social Security money that is withheld during working years is gradually repaid after full retirement age. Additionally, working longer increases annual Social Security benefits.
  • Claiming too early. Monthly benefits increase 8 percent for each year that you delay collecting benefits beyond your full retirement age. For those with average life expectancies, claiming later results in about the same amount of benefits collected over time, but for anyone who expects to live longer than average (especially women), delaying payments can guarantee a higher amount of income for a longer period of time.

Baby boomers who take the time to educate themselves about their benefits options will ultimately get more from their Social Security benefits, increasing their chances of a long, enjoyable retirement.

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