Social Security benefits are vital, but navigating the system comes with its challenges. Certain actions, intentional or not, could disrupt or even forfeit your payments. Knowing what to avoid is key. Here are 10 actions that could jeopardize your Social Security benefits.
Failing to Report Changes in Employment
Ignoring employment changes? That’s risky! Social Security requires accurate income reporting, especially for those receiving disability benefits. For instance, earning above $1,550 per month (2024 limit) can suspend payments. Stay vigilant with updates to avoid overpayments, penalties, or benefit interruptions.
Claiming Benefits Too Early Without a Long-Term Plan
If you rush to claim Social Security benefits at age 62, it might cost you. Early claims reduce monthly payments permanently—up to 30% less than waiting until full retirement age. Did you know delaying until 70 maximizes payments, adding an 8% annual increase? Consider future needs carefully to avoid regret.
Ignoring Tax Implications of Benefits
Taxes on Social Security benefits can catch you off guard. For example, if your combined income exceeds $25,000(single) and $32,000 (joint filing), up to 50% of benefits could be taxable. Consider this: strategic withdrawals from retirement accounts can keep your taxable income below thresholds. Avoid unnecessary tax burdens.
Not Correcting Errors in Your Earnings Record
Mistakes in your earnings record? They could cost you dearly! Since Social Security calculates benefits based on lifetime earnings, even minor inaccuracies matter. Regularly check your record on SSA’s website. Correcting errors early ensures fair payments later.
Exceeding the Earnings Limit While Receiving Benefits
Earnings limits matter if you claim benefits before full retirement age. Exceeding $22,320 in 2024 results in a $1 reduction for every $2 earned over the annual limit. Think twice about working extra hours. At full retirement age, earnings limits vanish, restoring full payments.
Failing to Report Changes in Marital Status
Marital changes affect spousal, survivor, or divorced benefits. For example, remarriage can cancel certain survivor benefits. Notify Social Security immediately about changes to avoid disruptions. Keeping records accurate ensures timely adjustments, whether you’re newly married, divorced, or widowed.
Mismanaging Disability Benefits Reviews
Disability reviews aren’t optional—they verify ongoing eligibility. If your medical condition improves or you skip review requirements, benefits might stop. Respond promptly to review notices and provide updated medical documents. Proactive compliance ensures continued support.
Overlooking Benefits for Dependents or Survivors
Dependents and survivors can claim additional Social Security benefits, but you must apply. For example, a child under 18 could receive up to half of a parent’s benefits. Forgetting to file means forfeiting funds. Explore every eligible benefit and claim them without delay.
Providing False Information on Applications
False application details can lead to severe consequences, including loss of benefits and charges. The SSA actively investigates fraudulent claims. It is estimated that the SSA OIG accomplished over $179 million in monetary accomplishments in 2022. Be honest and provide accurate information to maintain eligibility.
Ignoring Medicare Enrollment Deadlines
Delaying Medicare enrollment beyond age 65 without valid exceptions results in lifetime penalties. For instance, late Part B enrollment adds a 10% penalty for each year of delay. Act promptly to avoid higher costs and ensure uninterrupted health coverage tied to Social Security benefits.
