Pitfalls to Watch For

Filing for Social Security is an irrevocable decision once your initial 12-month withdrawal window passes. Avoiding common errors will protect your long-term financial security. Watch out for these frequent mistakes:

• Taking your statement estimate as a guarantee. The estimate on your Social Security statement assumes you will continue earning your current salary until the age you claim. If you stop working at 60 but wait until 67 to claim, your actual benefit will likely be lower than the estimate you saw at age 59 because of the missing years of wages.
• Failing to coordinate with your spouse. Married couples often claim in a vacuum rather than treating their benefits as a joint asset. The timing of the higher earner’s claim directly dictates the permanent survivor benefit for the remaining spouse.
• Forgetting Medicare premiums. When calculating your retirement budget, remember that Medicare Part B premiums will be deducted directly from your check. Your gross benefit is rarely the amount deposited into your checking account.
• Applying in the middle of a high-earning year. If you claim early and are still working a high-paying job, the earnings test will severely disrupt your checks. Ensure you understand the specific annual limits before submitting your application.