I’m a Social Security Expert: 7 Things Americans Should Never Do With Their Checks

According to News Break, Claiming Social Security is a significant milestone, marking a new chapter in many Americans’ lives. While deciding when to claim your benefits is important, understanding what to do—and what not to do—once you start receiving them is equally crucial. Navigating the complexities of Social Security can feel overwhelming, and there are several pitfalls that experts warn retirees to avoid.

Here are key mistakes you should steer clear of when managing your Social Security checks.

Don’t Claim Early

Many experts caution against claiming Social Security benefits early, as it can lead to a substantial loss in lifetime income.

“Unless there is an absolute good reason, taking early benefits can cost thousands of dollars over your lifetime,” says Chuck Czajka, certified Social Security claiming strategist (CSSCS) and founder of Macro Money Concepts.

Although you can start collecting benefits as early as age 62, waiting until full retirement age—65 or even 70—can significantly increase your monthly payments. According to Scott Lieberman, founder of Touchdown Money, “Waiting until age 70 increases your benefits by 75% compared to taking them early at age 62.”

Don’t View Social Security Checks as ‘Extra Money’

One common mistake is thinking of Social Security benefits as a bonus or extra spending money.

Erika Kullberg, an attorney and personal finance expert, stresses the importance of budgeting carefully. “You should use these checks to cover fixed living expenses like rent, food, healthcare, and utilities,” she advises. “Overspending these funds can create other financial problems, so you need a plan for where the money goes each month.”

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Don’t Continue Working or Underreport Alternative Income

If you’re still working while receiving Social Security, it’s important to be aware of the income limits. According to the Social Security Administration (SSA), in 2024, if you haven’t reached full retirement age, the earnings limit is $22,320. For every $2 you earn over that amount, $1 is withheld from your benefits.

Josh Richner, founder of FaithWorks Financial, also emphasizes the need to report any additional income from part-time jobs or freelancing. “Failing to do so can result in a reduction of benefits or even require repayment if you exceed the earnings limit,” he warns.

Don’t Co-Mingle Social Security Income With Other Funds

Another important tip is to avoid mixing your Social Security benefits with other types of income in the same bank account.

“When protected income like Social Security is combined with regular earnings, it can be difficult to differentiate which portion is protected,” says Richner. “In the unfortunate event of wage garnishment, your entire account could be at risk, even though Social Security benefits are legally protected.” To avoid this risk, Richner advises keeping a separate account exclusively for Social Security deposits.

Don’t Take Cash Advances Against Your Checks

Some lenders offer cash advances against future Social Security payments, but experts strongly advise against this.

Dana Anspach, a certified financial planner and founder of Sensible Money, warns, “High fees and interest rates can send you into a downward financial spiral, making it harder to manage your monthly budget.”

Don’t Forget About Taxes

While many retirees assume Social Security benefits are tax-free, this isn’t always the case. If you have other sources of income, a portion of your Social Security may be taxable.

Anspach suggests consulting a tax professional or using tax software to determine how much you may owe and set aside funds accordingly to avoid surprises during tax season.

Don’t Forget To Keep Saving

Even in retirement, saving for future expenses is essential.

Kullberg advises building up an emergency fund. “Set aside a small portion of your monthly Social Security check into a reserve account to ensure you’re prepared for unexpected financial challenges,” she says.