The biggest mistakes with Social Security start long before retirement begins—many Americans are permanently reducing their income by making avoidable missteps. Recent updates from the Social Security Administration (SSA) and financial planning experts show that timing, earnings, and benefit coordination remain critical. For example, the earnings-limit for 2025 stands at $23,400 for those under full retirement age and rises significantly in the year you hit full retirement age.
Here are the most costly errors U.S. retirees (and future retirees) commit—and what you should do instead.
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Filing Too Early
One of the biggest mistakes with Social Security is claiming benefits at age 62 when you could wait. If your full retirement age (FRA) is 67 and you file at 62, you risk a reduction of up to around 30% in your monthly benefit. Begin benefits earlier only if you truly need the income and understand the trade-off.
Why this matters:
- Delaying benefits past FRA up to age 70 can boost your benefit by roughly 8% each year.
- If you expect a long retirement, the extra amount can add up to tens of thousands of dollars.
What to do: - Determine your correct FRA based on your birth year.
- Balance other income sources and health/life-expectancy when deciding when to claim.
Misunderstanding Your Full Retirement Age (FRA)
Many people assume FRA is age 65. That’s wrong for most current retirees: if you were born in 1960 or later, your FRA is 67. If you assume incorrectly, you may claim too early or misjudge your benefit.
Why this is a mistake:
- Filing before your actual FRA permanently reduces your benefit.
- Working while claiming early may trigger deductions if you haven’t yet reached FRA.
What to do: - Look up your exact FRA on SSA’s website.
- Build your claiming decision around that age—not a generic figure.
Ignoring Spousal and Survivor Benefits
Another big error: overlooking benefits available through a spouse’s work record or as a surviving spouse. If married or widowed, spousal/survivor benefit rules can significantly augment your income.
Key points:
- A spouse may be eligible for up to 50% of the partner’s full benefit (if they wait until their own FRA).
- A surviving spouse might qualify for up to 100% of the deceased spouse’s benefit, depending on timing.
What to do: - Review both your own benefit estimate and what you may get as spouse/survivor.
- Consult a retirement specialist to coordinate the optimal claiming strategy for both partners.
Working While Receiving Benefits Without Considering Earnings Limits
Claiming benefits early and continuing to work can be a costly combo. The SSA sets earnings limits for those under FRA. If you exceed the limit, your benefit may be reduced temporarily.
2025 figures & rules:
- The under-FRA earnings limit is $23,400. If you earn more, the SSA deducts $1 for every $2 above the limit.
- In the year you reach FRA, the limit jumps (about $62,160), but you still face a deduction of $1 for every $3 over the limit until FRA is reached.
What to do: - If you plan to keep working while drawing benefits, factor in how your work income affects your SSA benefit.
- Consider delaying your claim until you stop working or reduce earnings.
Over-reliance on Social Security as Your Sole Retirement Income
Assuming that Social Security will cover most or all of your retirement expenses is another common and risky mistake. The average monthly benefit is modest and may not keep up with rising living and health-care costs.
Risks:
- Inflation, longevity (living into your 80s/90s), and healthcare costs can erode your purchasing power.
- If you relied solely on SSA benefits, you may have to draw down savings faster or adjust your lifestyle significantly.
What to do: - Treat Social Security as one pillar of retirement income—not your only pillar.
- Build other income sources: savings, employer retirement plans, investments, real estate, etc.
- Review your plan periodically to ensure it keeps pace with changing circumstances.
Failing to Review Your Earnings History
Your benefit is calculated based on your highest 35 years of earnings. If years are missing or incorrect on your SSA record, your monthly benefit could be lower than it should be.
Why this happens:
- Employers may have mis-reported wages.
- You may have gaps in employment, or credits may not be recorded correctly.
What to do: - Log into your SSA account and review your lifetime earnings statement.
- If you spot mistakes, file for correction well before claiming benefits.
Not Factoring in Life Expectancy When Choosing When to Claim
Deciding when to claim benefits isn’t just a math exercise—it’s a personal decision tied to health, life expectancy, work, and financial resources. Not factoring this in is a major mistake with Social Security.
Considerations:
- If you expect to live into your 80s or beyond and are in good health, delaying claims often makes sense.
- If you have health issues or a shorter expected lifespan, earlier claiming might be appropriate.
- The breakeven point—where waiting pays off more than claiming earlier—often falls in your early 80s.
What to do: - Be honest about your health condition and family longevity trends.
- Consult a retirement planner to run scenarios for both early and delayed filing.
Final Thoughts
Avoiding the biggest mistakes with Social Security isn’t just about memorizing rules—it’s about aligning those rules with your personal circumstances: timing, work plans, health, spousal status and other retirement income. By focusing on when to claim, coordinating benefits across spouses, reviewing your work record, and building other income sources, you’ll optimize your benefit and avoid costly regrets.
Have questions or personal experiences about claiming Social Security benefits? Leave a comment below—I’d love to hear your story and learn together.