5 Reasons Your Social Security Check is Less Than You Expected

It's critical to plan for your Social Security earnings so you're not shocked later on.
Updated May 1, 2024
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When the day comes that you’re ready to retire, you hope your Social Security check is going to be high enough to allow you to live comfortably. While you are working, the Social Security Administration sends an annual notice providing information about what your benefit check will be. If you haven’t been paying attention to those annual notices, you may be shocked that it’s not what you expected. Now, your financial stress has reached the next level.

Assuming that you qualify for Social Security, here are some of the most common reasons why your check may be less than you expected.

You took benefits as soon as possible

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Waiting to collect your benefit until your full retirement age leads to the larger check, and that’s likely to be when you read 66 or 67, depending on your birth year. While it’s possible to start receiving benefits at age 62, doing so is going to cost you. For example, if your full retirement age is 67 and you decide to retire as soon as you’re eligible at the age of 62, you’re tacking on an additional 60 months of payments. That means your check is likely to be 30% less than if you stuck it out and waited until you reached age 67. 

If you’re in good health and enjoy working, you can delay—and increase—your benefit until you reach age 70 (you can delay taking the benefit even longer, but your benefit won’t increase). That’s going to give you an extra 8% for every year after your full retirement age.

You didn’t earn income in at least 35 years

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The longer you work, the more you put into Social Security. Social Security will use your highest 35 years of earnings to determine how much you should be paid and then calculate your monthly average benefit. To receive the biggest benefit possible, you’ll need to have contributed for at least 35 years: if you did not work for all 35 years, that means some years, you would have had zero income. The more years with nothing earned, the lower your average earnings will be.

You didn’t earn enough income

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Your Social Security benefit amount is based on the amount of income you earned, which determines your contributions—in the form of taxes paid by you and your employer—to Social Security. Since those contributions are a percentage of your income, the lower your income, the lower your contributions and the smaller your eventual benefit will be. Even if you earned income for 35 years, if it wasn’t much income, you won’t get much benefit. In this situation, you may need to supplement your income to reach your financial goals.

You never estimated benefits ahead of time

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Did you take the time to find out what your benefits were likely to be leading up to retirement? The easiest way to get this information is online, by creating a “My Social Security” account at the Social Security Administration’s website. This account provides you with access to all the information the Social Security Administration has gathered, including your full retirement age, how many credits you have, and how much your estimated benefits will be. The benefit estimation changes annually based on your contributions for the current year. 

For that reason, you should check this figure each year to be sure you have a good idea of what’s to come. Most often, Social Security also sends a letter in the mail annually updating you on this information. Still, it’s your responsibility to make sure the information is accurate.

Your Medicare deduction is higher than you thought it would be

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Medicare seems like a simple thing: you reach age 65 and start tapping into federally funded health care. It’s not always that simple, though. If you sign up to receive Medicare Part B, the premium, or cost for that coverage, is deducted from your Social Security check. That happens to most people, and it’s to be expected. However, if you fall into a higher tax bracket, you’ll have more money taken out of your check. If your income drops, however, be sure to alert the Social Security Administration about this, as you may be able to reduce how much you’re paying for Medicare.

Bottom line

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For those looking forward to Social Security benefits in retirement, it’s critical to know what lies ahead. You may decide to work longer or to take on some additional work now to boost your contributions, which will boost your benefits. On the other hand, if you’re comfortable with your expected benefits, you may be able to retire even sooner. But it is important to be informed: just because this is a government “benefit” doesn’t mean you shouldn’t know what to expect from Social Security.

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Author Details

Sandy Baker Sandy Baker is a has over 17 years of experience in the financial sector. Her experience includes website content, blogs, and social media. She’s worked with companies such as Realtor.com, Bankrate, TransUnion, Equifax, and Consumer Affairs.

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