I’m a CPA and private finance author with greater than 30 years of expertise, which incorporates writing dozens of articles about Social Safety.
However when it got here time to file for my very own Social Safety final yr, I needed to pause.
I believed I knew the system inside and outside. However as soon as I moved from the theoretical aspect of the desk to the retiree aspect, I spotted that the system is full of invisible tripwires.
There are tax cliffs that aren’t listed for inflation. There are work limits that may freeze your advantages. There are breakeven myths that sound good however are literally mathematically illiterate.
If a CPA can get tripped up by these guidelines, I do know it’s occurring to everybody else. Listed here are the 5 dumbest errors I see retirees make — and the way I averted them.
1. Falling for a typical tax delusion
Most individuals assume that since they paid taxes on their wages earlier than they went into Social Safety, their advantages might be tax-free.
That’s a logical assumption, however solely true when you have little or no different revenue.
When you’ve got different revenue sources — like a pension, withdrawals from a 401(ok) and even part-time work — you’ll possible set off a tax formulation generally known as provisional income.
The IRS takes your adjusted gross income, provides any tax-free curiosity after which provides half of your Social Safety advantages. If that quantity is over $25,000 (for single filers) or $32,000 (for these married submitting collectively), you owe taxes on as much as 50% of your advantages. If it goes over $34,000 for single filers or $44,000 for joint returns, you owe taxes on as much as 85% of your advantages.
Right here’s the kicker: These thresholds have been set within the Eighties and by no means adjusted for inflation. They have been meant to tax the wealthy, however right now, they hit the center class. Be ready for this tax invoice as a result of it catches many of us off guard yearly.
2. Obsessing over the breakeven age
Once I advised my mates I used to be fascinated about delaying my advantages declare till I hit age 70, all of them stated the identical factor: “However what should you die?”
They pulled out napkins and calculated my breakeven age — the age I’d need to stay to for the larger checks to beat the smaller, early checks. Often, the maths says you must stay to about 80 to return out forward.
Right here’s the issue with that math: It assumes you will die younger.
In line with the Social Safety Administration’s actuarial tables, should you’re a person who has already made it to 65, your common life expectancy is one other 18 years (age 83). In case you’re a lady, it’s practically 21 years (age 86).
In case you declare early at 62 to “get yours” after which stay to 90, you value your self tens of hundreds of {dollars} in assured, inflation-protected revenue. Until you might have a severe well being subject, betting by yourself early dying is a foul monetary technique.
3. Working an excessive amount of (the earnings check)
I’ve a buddy who claimed advantages at 63 however stored his consulting gig. He thought he was double-dipping. Then he received a letter from the SSA telling him they have been withholding his checks.
He violated the earnings test.
In 2026, should you declare advantages earlier than your full retirement age, you possibly can solely earn $24,480 a yr. For each $2 you earn above that restrict, the federal government withholds $1 of your advantages.
They don’t take it without end. They ultimately recalculate your profit whenever you hit full retirement age to pay you again, however that doesn’t enable you pay the electrical invoice right now. In case you plan to maintain working, don’t declare early should you don’t need to.
4. Stiffing your partner
I’m the upper earner in my family. If I declare early, I’m completely capping the survivor profit my spouse will obtain if I die first.
When the upper earner dies, the decrease earner bumps as much as the upper earner’s verify. But when the upper earner took a lowered verify at 62, the surviving partner is caught with that lowered quantity for the remainder of their life.
If you’re the excessive earner, you aren’t simply delaying for your self. You’re basically shopping for a better lifetime revenue to your partner.
5. Setting it and forgetting it
Social Safety isn’t a “set it and neglect it” revenue stream.
Yearly, there’s a value of dwelling adjustment (COLA). In 2026, it’s 2.8%. However Medicare Part B premiums additionally rise, they usually’re deducted immediately out of your verify.
I verify my private “my Social Security” account on-line yearly. I verify the earnings report to verify they didn’t miss a yr of labor (which occurs greater than you assume). And I verify my tax withholding settings.
In case you don’t ask the SSA to withhold taxes out of your verify (kind W-4V), you will get hit with an enormous tax invoice in April. For a lot of, it’s much less painful to have it withheld month-to-month than to put in writing a giant verify to the IRS every year.
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