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2 Major Social Security Mistakes

It is no secret that most Americans are relying on their Social Security benefits to support them throughout their retirement years. However, many Americans are unknowingly making little mistakes that are drastically affecting their benefits in negative ways. Here we will discuss 3 major ways you could be cutting your Social Security benefits without you even knowing.

To start off, Social Security has the FRA system. FRA stands for Full Retirement Age. Your FRA is the age you reach when you are entitled to the maximum Social Security benefit payment. This is also based on your past years of work. If you want to set yourself up to obtain as much of these retirement benefits as possible, you will have to be working for a full 35 years to do so. The way this works is the Social Security Administration takes the average income of the highest income years you have had during your years of work. 

The Social Security Administration keeps track of how much you earn each year as well. Then, your benefit is calculated based on the 35 working years when you earned the most money when you retire. (Your past wages are indexed to bring them in line with current wage levels.) We advise those who are able to make it to their FRA to do so. 

Weigh all your options and try to wait till your FRA so you do not end up with reduced benefits. With this in mind, age 70 is the latest you should be waiting to file. Any time spent after this is a waste and only delaying you your benefit payments. Be ready to file when you turn age 70 for full potential of your benefit payments and you should be  well prepared for retirement. 

Next is claiming your social security benefits at the same time as Medicare. This is a common mistake for one simple reason. For medicare, you can be eligible at the age of 65. On the other hand, an American’s FRA can come 1-2 years later. If you are to take initiative and claim both at the same time, this means that you are claiming your Social Security benefits 1-2 years earlier than you should be, ultimately resulting in a cut for your Social Security benefits. 

Often, people claim both of these at the same time because they are both done online through the Social Security Administration. We strongly suggest to not do this and wait until you do reach your FRA. Waiting 1-2 more years to claim your Social Security benefits is worth the time and money you could be cutting out of your monthly compensation.