It appears that American workers have a knowledge gap about social security. This can lead to mistakes that will lose money once the benefits of the program begin.
Exhibition “A” is a recent T. Rowe price report from the Allianz Life Insurance Company in North America, with 53% of Americans saying they “don’t know much about how it fits into Social Security or retirement plans.” Still, most U.S. workers don’t want professional guidance on social security planning. Only 17% of financial advisers say they discussed “maximizing Social Security income during retirement.”
Why is there a disconnect between Americans and proper knowledge about social security? Experts say that not all citizens are responsible.
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“Social security confusion comes from lazyness and lack of information,” said Kevin, a financial advisor and certified social security prime minister who advocates a strategist in Palm Bay, Florida.
The ideal age for optimizing social security benefits can fall anywhere within that range. A proper timeline is a unique decision for each individual. “A wrong decision could mean thousands of dollars being lost during retirement, and could even increase the risk of quickly draining your personal investment portfolio,” the prime minister said.
It adds nuances of the effects of working while gathering spouse benefits, survivor benefits, social security taxes, and the benefits.
Uncovering potential social security blind spots
One good way to educate yourself about Social Security and the impact on individual retirees is to separate facts from the fiction about the benefits of the program and how they work.
Negative surprises can be eliminated by implementing robust due diligence, supported by a reliable financial advisor. During the review phase, focus on the “blind spots” that are particularly problematic. This could lead to decisions to withdraw Social Security without being addressed.
These five programme factors should be specifically scrutinized, social security experts say.
1. Assert early profits without panic, fear, or knowledge of consequences
You may need to claim benefits before you reach your full retirement age (FRA). But before you make that decision, make sure you know the outcomes that claim early profits. Many people do not review the rules thoroughly before making an official Social Security withdrawal decision.
Some people don’t plan to claim merit early, but they do so for emotional or unpredictable reasons. In 2025, concerns about the solvency of Social Security Trusts, which fund Social Security, led some to claim benefits earlier than planned. However, the ju umpire is still out on whether the funds will become insolvent and profits will be reduced. However, the fear of it happening led to some panicked withdrawal decision.
“Many retirees have already advocated benefits at age 62, often because they are afraid that Social Security could be “broken” or simply because they want to access their money immediately,” the prime minister said. “But if you argue early, monthly benefits will be permanently reduced, up to 30% less than you receive at full retirement age (FRA).
What’s worse, drawing out benefits early will cover income gaps, and increase the likelihood of running out of money later in life, as additional pressure puts on retirees’ portfolios.
“If your lifespan is longer, that’s a real risk,” the prime minister said. “In many cases, especially for healthy people, delaying profits can create a stronger, guaranteed flow of income, even up to the age of 70.”
2. Does not consider taxes related to social security benefits
Many retirees are shocked to learn that up to 85% of Social Security benefits could be taxed as normal income if they have other retirement income, such as pensions and withdrawals from the 401(k)s.
Fortunately, the correction is relatively easy. “We will consult with the CPA and financial advisor before asserting benefits,” said Joseph Patrick Loop, CEO of Belmont Capital Advisor in Charlotte, North Carolina.
3. Claim the benefits are too early while still working
Claiming profits before hitting the FRA can cause social security revenue tests and penalties while still working. Retirees overlook it.
If you make a claim early in 2025, the Social Security Agency (SSA) will temporarily withhold $1 for every two dollars you earn over $23,400. The penalty is lower in the year workers reach the FRA. Workers lose $1 in benefits for every $3 earned over $62,160.
You can completely throw away your annual revenue test by waiting until your full retirement age to claim benefits. When you hit the FRA, you can freely earn the amount you like and will receive the withholding benefits.
“When you reach full retirement age, withholding benefits will recover, but the plan will prevent surprises,” added Roop.
Roop said many more people don’t know that if they have already filed it can suspend and restart the benefits at a later date.
By suspending, delayed retirement credits can increase by about 8% per year until age 70, increasing future income if circumstances change. ”
4. Underestimating life expectancy
No one can predict how long they will live, so it’s best to plan all the possibilities.
“People live long and to enjoy your golden age, you need to explain how long they can last,” said Kimberly Gattis, senior vice president of financial planning at UMB Bank.
Social Security website has a longevity calculator. Gattis recommends meeting with a financial advisor to ensure you have a detailed long-term plan.
“The plan should be adjusted to meet the expected income and Social Security benefits, with additional cushions for unexpected costs,” she said. “As time goes by, we plan to adjust and readjust your spending. The biggest factor in ensuring that you have enough funding to last throughout your retirement is understanding your cash flow and predicting your needs.”
5. Ignore you taking the funds you legally owed as an ex-spouse
In many cases, Social Security recipients should overlook the ability to collect the benefits of their spouses and survivors and do not do the calculations necessary to ensure more.
“If you’re 62 or older, married for over 10 years, and currently unmarried (or remarried at over 62) are divorced for more than two years, and your ex-spouse is over 62, you can earn profits based on your Ex spouse’s earnings.”
You can contact the Social Security Administration to determine if it is better to assert Social Security or the benefits of a spouse or survivor.
Before applying, take advantage of the help provided by the Social Security Agency to ensure the best and most accurate forecasts of your expected Social Security benefits.
“Beneficiaries need to use safe and approved tools, such as the Social Security Administration’s online benefits calculator,” Gattis said.
Tools like my Social Security Resignation Estimates and Early or Late Resignation Calculator have secure access to your account to ensure your benefits estimates are accurate. “With these tools, you can see how different scenarios, such as life expectancy and retirement age, affect your benefits,” Gattis said.
