According to THE SUN, Social Security is a vital financial safety net for many Americans, offering retirement, disability, and survivor benefits. Workers contribute a percentage of their paychecks to Social Security taxes, which supports their future benefits. However, accurately predicting and understanding these benefits can be complex.
Common Mistakes with Social Security
- Over-Reliance on Estimates
One common mistake is placing too much trust in Social Security benefit projections. Shalae Morgan, a money expert and YouTube content creator with over 514,000 followers (@shalaemorgan), explains that these estimates assume workers will continue paying into Social Security at their current income levels until retirement. If workers retire early or stop contributing, their actual benefits may be significantly lower than projected.
Morgan highlights the importance of understanding how the age at which you begin receiving benefits impacts your payment amounts. While you can start receiving benefits at age 62, those who wait until their full retirement age or even until age 70 can receive significantly higher monthly payments. For example:
- Age 62: Up to $2,710 per month
- Full Retirement Age (2024): Up to $3,822 per month
- Age 70: Up to $4,873 per month (an additional $2,163 per month or $25,956 per year compared to starting at age 62)
Morgan advises delaying your benefits to maximize your monthly payments.
- Relying on General Online Information
Another common error is depending too much on generic information found through a quick Google search. Morgan notes that online information often lacks the personal relevance needed for individual financial planning. Social Security benefits are not one-size-fits-all, and personalized advice is crucial.
Also Read: Ohio-based Big Lots files for bankruptcy after store closings
Morgan recommends seeking professional guidance or attending Social Security seminars and workshops, many of which are free and virtual. These resources can provide tailored insights into maximizing your benefits.
Tools and Resources
Morgan also suggests using various online calculators to estimate your benefits and plan for retirement. The Social Security Administration offers tools like retirement age calculators, life expectancy calculators, and benefits calculators for spouses, which can help you better understand your future benefits.
Additional Financial Advice
Morgan has shared other financial tips, including how she paid off $173,000 in student loans in under two years and strategies for finding free money and alternative income sources.
By avoiding common mistakes and utilizing available resources, you can make more informed decisions about your Social Security benefits and better prepare for retirement.
