If you end up making any of the costly yet common Social Security mistakes that are shared with you today, you could end up paying for it in a big way. Here’s how you can avoid this dilemma.
Know Spousal Benefits
A lot of couples coordinate their Social Security benefits and when they claim them. Doing so can mean a bigger payday for you both. But there are certain age factors that make your benefits amounts vary, and there are times that you should wait to claim certain ones because you get more by being patient. These Social Security basics can help you get a head start here.
Stopping and Starting
If you think that you can stop and start your benefits without any recourse, think again. You do not have the option to turn off the benefits by repaying them within 12 months and resetting them. Once you choose to start taking your benefits, they keep coming, unless you meet certain requirements that let you stop taking them. Fox Business offers a more detailed breakdown on this.
Not Knowing the Earnings Limit
You can claim benefits before you are of the retirement age. But if you do, you will be accepting less benefits than you would get were you to wait. And, if you are working and receiving these benefits, it’s possible that you’d have to repay some of them, depending upon what your earnings test results are.
Understanding Potential Survivor Benefits
Social Security keeps paying you even if your spouse dies. The payout will determine which spouse was getting the most benefits, and will adjust your checks to that amount. The lesser amount goes away, though. Sometimes people overlook this aspect, when they should be maximizing the benefits of the highest income earner instead.
There Can Be Taxes
You can be taxed on your Social Security benefits. But it’s a very complicated formula that is used. To know whether or not your benefits will be taxed, take a look at this related publication by the Social Security Administration. Generally, benefits are only taxed if you are earning substantial income outside of them.