Here are 4 things that could potentially mean less money in your pocket during retirement.
There are many reasons that could cause your Social Retirement payments to decrease, and while some of those reasons are beyond your control, there are some others that you can do something about. Here are some things you should avoid:
1- Failing to provide correct wage information
Your Social Security benefits are calculated based on your lifetime income record. If the government does not have the correct wage information, you might end up getting a smaller check.
To make sure all the information is correct, sign up for your own account at the Social Security Administrator website. This will allow you to review your earning history, among other options.
2- Missing the Medicare application window
The full retirement age has been slowly changing, but the age for Medicare eligibility has remained the same. If you are not applying for Social Security until age 66 or older, you still need to apply for Medicare at the age of 65. If you fail to do so, you might be charged late enrollment penalties.
3- Claiming retirement benefits early
If you claim Social Security benefits before reaching your full retirement age (as set by the SSA), you will receive a smaller check going forward. The government has no problem in sending you checks at the age of 62, but this is going to reduce your monthly payment, possibly by up to one-third or more.
4- Getting your full retirement age wrong
You might follow every step and thing you are doing everything right by filing for Social Security benefits at the age of 65, but this will currently reduce your payment too. 65 was long considered the full retirement age, but the government has been slowly moving it.
If you were born between 1943 and 1954, your full retirement age is 66. This number increases by two months each year (for example, 66 and 6 months if you were born in 1957) until you reach the new full retirement age of 67 (for those born in or after 1960).