If you’re feeling confused about Social Security benefits, please know that you’re in good company. The Allianz Life Insurance Company of North America recently found that 53% of Americans openly admit they don’t understand much about Social Security or how it fits into their retirement picture. Even more telling is that only 17% of people working with financial advisers have actually had conversations about maximizing their Social Security payments.

This widespread confusion isn’t a reflection of your intelligence or dedication to planning. Kevin Chancellor, a financial adviser and certified Social Security claiming strategist in Palm Bay, Florida, reminds us that the Social Security system is genuinely complex by design. Many people simply don’t realize the substantial financial difference between claiming benefits at 62 versus waiting until 70.

The stakes are real, and the consequences of uninformed decisions can follow you throughout retirement. Chancellor emphasizes that making the wrong choice could cost you thousands of dollars over your lifetime and might even force you to draw down your personal savings too quickly. When you consider spousal benefits, survivor benefits, tax implications, and the rules around working while collecting benefits, it’s completely understandable why so many people feel overwhelmed.

Why Taking Time to Plan Your Social Security Really Matters

Social Security planning resembles navigating a complex puzzle where each piece represents a different claiming strategy. The optimal age to claim your benefits might fall anywhere between 62 and 70, making this a deeply personal decision that deserves careful thought about your specific situation.

Understanding when to take Social Security becomes crucial for your long-term financial security. The path to avoiding costly mistakes starts with thorough research, ideally with support from a trusted financial advisor who understands your circumstances. During this process, you’ll want to pay special attention to identifying potential blind spots that could lead to expensive claiming decisions. Recognizing these common pitfalls can empower you to make more confident choices about when and how to claim your benefits.

Five Areas Where Well-Meaning Retirees Often Struggle

Claiming Early Because of Worry or Confusion

Have you ever found yourself making a financial decision based on fear rather than facts? This happens more often than you might think with Social Security claiming strategies. While there are certainly valid reasons that might require claiming benefits before your full retirement age, many people make this choice without fully grasping the long-term impact.

In 2025, concerns about Social Security changes have prompted some individuals to claim benefits earlier than they initially planned. They’re worried that if they don’t act quickly, their benefits might be reduced. However, experts are still debating whether the trust funds will actually become insolvent and cause benefit cuts, yet fear of this possibility has led to some rushed decisions.

Chancellor observes that many retirees claim benefits as early as age 62, often because they’re afraid Social Security might disappear or simply because they want access to the money immediately. Unfortunately, claiming early results in a permanent reduction in monthly benefits—a permanent reduction in monthly benefits up to 30% less than what you’d receive at full retirement age. This reduction can put additional strain on your personal savings to cover income gaps, potentially increasing the risk of running out of money later in life.

With people living longer than previous generations, this becomes a genuine concern worth addressing. In many situations, delaying benefits until age 70 can create a much stronger and guaranteed income stream, particularly for those in good health who plan to retire on Social Security.

Not Considering the Tax Consequences of Social Security Benefits

Many retirees experience an unpleasant surprise when they receive their first Social Security check and discover that a significant portion will be subject to federal income taxes. It’s completely understandable to feel caught off guard learning that up to 85% of your Social Security benefits could be taxed as ordinary income if you have other retirement income sources, such as pensions or 401(k) withdrawals.

Joseph Patrick Roop, CEO at Belmont Capital Advisors in Charlotte, North Carolina, offers reassuring guidance for this situation. He suggests consulting with your CPA and financial advisor before claiming benefits. Strategic income planning, such as carefully timing withdrawals or utilizing Roth accounts, can help minimize or even eliminate this tax burden. You might also consider Roth IRA conversions before starting Social Security to create more tax-efficient retirement income.

Working While Collecting Social Security Benefits Before Full Retirement Age

You might not realize that claiming benefits before reaching your full retirement age while still working can trigger penalties through what’s called the Social Security Administration guidelines. This catches many well-intentioned retirees by surprise.

According to Social Security Administration guidelines, if you claim early in 2025, they temporarily withhold $1 of benefits for every $2 earned above $23,400. In the year you reach full retirement age, the penalty is more forgiving; you’d lose $1 in benefits for every $3 earned above $62,160.

By waiting to claim benefits until your full retirement age, you can avoid the annual earnings test entirely. Once you’ve reached full retirement age, you’re free to earn whatever amount you choose, and any previously withheld benefits will be returned to you.

Roop points out that while withheld benefits are restored once you reach full retirement age, planning ahead prevents unwelcome surprises. Many people also don’t realize that if they’ve already filed, they can suspend benefits and restart at a later date. Suspending allows benefits to grow by approximately 8% per year until age 70 through delayed retirement credits, which can significantly boost your future income if your circumstances change.

Underestimating Your Life Expectancy When Planning Social Security

How long do you expect to live? While none of us can predict our exact lifespan, it’s crucial to plan for various possibilities when making Social Security decisions.

Kimberly Gattis, senior vice president for financial planning at UMB Bank, gently reminds us that people are living longer, and to truly enjoy your retirement years, you must account for how long they might last. The Social Security website provides a longevity calculator that can assist with this planning process.

Gattis recommends meeting with your financial advisor to develop a detailed long-term plan tailored to your anticipated income and Social Security benefits, with some buffer for unexpected expenses. She suggests planning to adjust and recalibrate your spending as circumstances evolve. The most important factor in ensuring you have sufficient funds throughout retirement is understanding your cash flow and anticipating your future needs.

Overlooking Ex-Spouse Social Security Benefits

Are you potentially missing out on money that’s rightfully yours? Too often, Social Security recipients don’t realize they can collect spousal or survivor benefits and fail to make the calculations needed to ensure they’re receiving the larger amount.

Eric M. Steffy, founder and CEO at Federal Solutions Report in Daytona Beach, Florida, explains the eligibility requirements with clarity. If you’re 62 or older, were married for 10 or more consecutive years and are currently unmarried (or remarried at age 62 or older), have been divorced for two or more years, and your former spouse is 62 or older, you can receive benefits based on your ex-spouse’s earnings record.

You can contact the Social Security Administration to determine whether you’re better off claiming your own Social Security benefits or spousal/survivor benefits. This comparison could reveal significant differences in monthly payments that might influence your claiming strategy. Understanding Social Security benefits after death can also help you plan for your spouse’s future financial security.

Taking Advantage of Helpful Social Security Resources

The Social Security Administration offers several tools designed to help you make informed decisions about your benefits. Rather than making assumptions about your potential payments, you can take advantage of these official resources.

Gattis encourages beneficiaries to use safe and approved tools like the Social Security Administration’s online benefit calculators. Resources such as the My Social Security Retirement Estimate and Early or Late Retirement Calculator provide secure access to your account information to ensure your benefits estimate is accurate. These tools also allow you to explore how different scenarios like lifespan and retirement age could affect your benefit amount.

By utilizing these resources and working with qualified professionals who understand your situation, you can develop a comprehensive understanding of your Social Security options and make decisions that support your long-term financial well-being. Remember, taking the time to understand your options now can make a meaningful difference in your retirement security.