15 Social Security Nuances Financial Advisors Wish All Retirees Knew

When it comes to planning for retirement, Social Security income represents one important income stream for many retirees. As of 2025, the average monthly Social Security payment amount is $1,927 for individuals and $3,089 for eligible married couples.

But, Social Security income is often misunderstood, which can cause both current and future retirees to make surprising financial mistakes.

Keep reading to learn what TK financial advisors wish retirees knew about Social Security so that you can be better prepared when it comes time to access your benefits.

Just because you can draw on your Social Security benefits, it doesn’t mean you should, according to Melissa Murphy Pavone, CFP, CDFA, and founder at Mindful Financial Partners.

“While you can start collecting at age 62, waiting until full retirement age (FRA) or even age 70 can significantly increase your monthly benefit,” Pavone continues, “Each year you delay past FRA, your benefit grows by about 8% per year until age 70.”

Some retirees will be able to access more than just their own benefits.

“Married, divorced (if the marriage lasted at least 10 years), or widowed individuals may have spousal or survivor benefits that could be higher than their own,” according to Pavone, who says it’s important for people to not only understand the differences between these benefits, but to also know how and when to claim them.

Don’t forget to plan on paying taxes on this income during your retirement years.

“Many retirees don’t realize that up to 85% of their Social Security benefits may be taxable, depending on their total income,” says Pavone.

But that doesn’t mean you’ll be completely out of luck when April 15th rolls around. “Proper tax planning can help minimize this burden,” Pavone says.

Although some retirees expect to live off of Social Security alone, that’s often not feasible.

“While Social Security provides a foundation, it was never meant to be your sole source of retirement income,” says Pavone. “A diversified retirement strategy, including investments, pensions, and savings, is crucial for long-term financial security.”

For anyone looking to claim your benefits while you continue working, think carefully about your choice because you might be penalized for it.

“If you claim Social Security before your full retirement age and continue working, your benefits may be temporarily reduced if your earnings exceed certain limits,” says Pavone. “However, once you reach FRA, there’s no penalty for working.”

Even if you get hit with a penalty, working can help you make ends meet with your Social Security check.

“Some retirees hesitate to work after claiming Social Security because they hear their benefits might be reduced,” says Andrew Latham, CFP with SuperMoney.

“Here’s the truth: If you claim before full retirement age and earn more than $22,320 in 2024, Social Security might temporarily withhold part of your check,” Latham says. “But — and this is a big but — once you hit FRA, they recalculate your benefit and give you credit for the withheld amount.”

So, you’re not actually losing money long-term, according to Latham.

“And beyond Social Security, working in retirement can be a financial lifesaver — it helps preserve your savings, fights inflation, and gives you purpose and social engagement,” he continues. “If you enjoy working (or just like extra cash), don’t let Social Security rules scare you away.”

Lantham warns against forgetting to factor in your tax bill into your retirement budget. “If you thought Social Security was tax-free, think again,” he says.

“After decades of paying into the system, the IRS might still take a bite out of your check,” Latham continues, noting that the tax hit depends on your combined income, offering the example of adjusted gross income + tax-exempt interest + half of your Social Security benefits.

“The good news? With a little planning — like strategic withdrawals from taxable, tax-deferred, and Roth accounts — you can keep more of your money where it belongs: in your pocket.”

If you lose a spouse, planning out your survivor benefits could significantly alter your financial future.

“Many retirees only think about their own Social Security check — but what about their spouse’s future? If you’re the higher earner, delaying your benefit isn’t just about getting a bigger check for yourself — it also boosts the survivor benefit your spouse will receive if you pass away first,” says Latham.

A widow or widower can receive up to 100% of the deceased spouse’s benefit, according to Latham, meaning your Social Security decision could impact your loved one for decades. “This is especially critical if one spouse didn’t work much or earned far less.”

Bottom line? When making your Social Security decision, Latham says you should avoid just thinking about today, and instead think about the financial security of the person you love most.

When it comes to Social Security, working like a team can help, says Lawrence D. Sprung, CFP, author of Financial Planning Made Personal, and founder of Miltin Financial.

“Spousal benefits allow a lower income earning spouse to collect either on their own social security record or receive 50% of the higher earning income spouse’s benefit,” says Sprung.

You’ll just need to be sure that you are claiming the benefit most beneficial to you and your spouse. “Spouses who may not have worked or earned enough credits for their own benefit will be entitled to 50% of their spouse's benefit.”

In your golden years, your Medicare premiums might take a big bite out of your Social Security benefits.

“I wish retirees knew that the majority of their social security benefits will likely be taxable and the premiums they pay for Medicare will come out of their social security checks,” says Stuart Schiffman, CFP at Compound Wealth Advisors.

“Medicare Part B premiums and any IRMAA surcharges (income related monthly adjusted amounts) also are automatically deducted from monthly social security benefits.”

Although tempting to jump into your benefits as soon as possible, this could mean less funds overall, says Sprung.

“Social Security benefits can begin to be claimed starting as early as age 62,” Sprung continues. “Starting this early, before full retirement, would cause you to incur approximately a 30% reduction in benefits for the life of your payments.”

Even though waiting could lead to higher benefits overall, it’s important to consider your unique situation, says Latham.

“A lot of people think delaying Social Security is always the smartest move, but it’s not that simple,” says Latham. “Yes, waiting past full retirement age boosts your benefit by 8% per year until 70 — which sounds like free money. But is it the right move for you? That depends.”

If you’re healthy, have other income to tide you over, and expect to live into your 80s or beyond, Latham says that delaying can be a great strategy.

On the other hand, if you need the money sooner, have health concerns, or think you can invest that money and do better, he says that claiming early might be the smarter move.

“The breakeven point — the age where delaying pays off in total lifetime benefits — is usually 78-82,” he continues. “If you don’t expect to be around that long, why wait? The bottom line: Social Security isn’t one-size-fits-all, so don’t let generic advice make this decision for you.”

Although you worked hard to get your benefits, the income you receive is largely out of your control. says Erika Kullberg, a personal finance expert.

“One thing I wish retirees kept in mind when thinking about Social Security is the lack of control around your earnings,” she says. “Social Security income is fixed income and far too often it isn’t enough to keep up with rising inflation.”

When mapping out a retirement plan, consider Social Security as one income stream among many. If you rely solely on this check, things might get tight along the way.

“Thinking of Social Security income as supplemental income is a good idea and you should plan to have a source of retirement income that you can continue to grow over time,” says Kullberg. “For example, investing your money in the stock market or managing a rental property.”

Kullberg says it’s important to use your working years to save for retirement.

“Because it can be so challenging to save enough money for retirement, it’s really important that workers contribute as much as they can to their retirement accounts each year,” she says. “Especially if they have access to an employer-sponsored 401(k) plan with an employer match.”

If possible, Kullberg recommends maxing out your contributions each year so you can collect as much “free money” from your employer as you can while also enjoying as many tax savings as possible.

As you prepare for retirement, understanding how Social Security works can help you make money moves. If you need help making the right decision for your own situation, consider working with a trusted financial advisor.

Not only are these professionals trained on the most common tax scenarios, but they can also help you figure out what will help you achieve your own personal goals ahead of your retirement.