5 Common Mistakes Retirees Make When Claiming Social Security

If you want a stress-free retirement, avoiding financial mistakes goes a long way toward making that happen. Maximizing your income from Social Security gives you more money to spend for the rest of your life, since these benefits won't run out until you die.

Unfortunately, many people make big Social Security mistakes that cost them thousands. Here are five common errors to look out for so this doesn't happen to you.

Claiming early out of fear of Social Security going broke

One of the biggest mistakes people make is starting their benefits too early because they're afraid Social Security is going broke and won't provide them with any benefits.

Only 32% of adults know the truth about what happens if Social Security's trust funds run out, according to an AARP survey. Most people think benefits disappear entirely. Unfortunately, these misperceptions, as well as media coverage of bad news about Social Security, often lead to people claiming benefits earlier than they should.

The best way to avoid this mistake is not to give in to panic. Even if Social Security's trust fund runs out in 2032, as the most recent Social Security Trustees Report says, Social Security still has enough revenue coming in to pay 78% of the promised benefits. And Congress is likely to act to stop major benefit cuts.

Make your claiming choice based on what makes sense for you given your family, health status, and retirement goals, and tune out the scary headlines.

Not understanding the earnings test

A failure to understand the Social Security earnings test is another big mistake. If you plan to work while collecting benefits before your full retirement age, this test applies to you.

Under the earnings test, if you earn above $24,480 and you won't hit your FRA at all during the year, you lose $1 for every $2 above this threshold. If you'll hit FRA during the year but haven't yet, and you earn above $65,160, you lose $1 for every $3 above this amount.

The earnings test does not mean you shouldn't work. You temporarily forfeit benefits if you earn too much, but your income is recalculated at full retirement age, so you'll get a higher check later.

But you need to be prepared for it, report your earnings to the Social Security Administration to avoid overpayments, and make informed choices about how much you want to earn, given the impact of paychecks on benefits.

Assuming Social Security benefits are tax-free

Assuming Social Security benefits are tax-free is another major mistake, and an understandable one, as President Trump touted the One Big Beautiful Bill Act as fulfillment of his promise not to tax Social Security benefits.

In reality, the tax rules remain unchanged on Social Security benefits, and if you earn above $25,000 as a single tax filer or $32,000 as a married joint filer, part of your benefits will be taxed. This is provisional income, which is half of your Social Security benefits, some taxable income, and some non-taxable income.

The OBBBA did introduce a new $6,000 deduction for seniors 65 and over whose income is within allowable limits. This deduction may bring your taxable income below the threshold where benefits are taxed. However, it won't do that for everyone. Those under 65 and high earners get no tax savings. And the deduction is only temporary until 2028.

To avoid this mistake, understand when taxes apply and prepare to pay them if you are above the earnings threshold.

Not understanding all of the benefits you're entitled to

A failure to fully understand all the benefits you could be eligible for is another common mistake, and a very costly one.

In fact, an Office of the Inspector General's report in April of 2026 revealed that widows lost over $113.8 million because they didn't understand they could claim survivor benefits and delay their retirement claim until 70.

Make sure this error doesn't trip you up by researching survivor and spousal benefits, finding out what you qualify for and how much income each type of benefit provides, and applying for the benefits that make the most sense given your situation.

Not running a break-even analysis before claiming benefits

Finally, failing to run a break-even analysis is a huge mistake that many retirees make. This involves comparing your benefit amounts at different claiming ages to see how long it would take you to break even for a delayed benefits claim.

Say, for example, you have a standard benefit of $2,071 at a full retirement age of 67. That's the average benefit in 2026. A claim at 62 would shrink that standard benefit to around $1,450, while a claim at 70 would increase it to $2,568. To run your break-even analysis:

• Calculate the missed income. That's eight years of $1,450 monthly benefits or $139,200
• Calculate the extra you collect. That's $2,568 - $1,450 or $1,118
• See how long it takes you to break even for missing $139,200 by dividing that amount by the extra you collect each month ($1,118).

You break even in this case in around 124.5 months or a little over 10 years. If you expect to live past 80, a later claim could be smart.

Bottom line

Avoiding Social Security mistakes pays off in the form of higher benefits for life. You don't want to make these five common errors, so make sure you fully understand the program when you make your retirement plan.

If you explore all the senior benefits available to you, make your Social Security claim based on a break-even analysis and an understanding of all benefits you're eligible for, and make informed choices on how you'll handle taxes and how much you'll work, you'll have the best chance of maxing out your Social Security benefits and having the money you need as a retiree.