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I\u2019m a CPA and personal finance writer with more than 30 years of experience, which includes writing dozens of articles about Social Security.<\/p>\n
But when it came time to file for my own Social Security last year, I had to pause.<\/p>\n
I thought I knew the system inside and out. But once I moved from the theoretical side of the desk to the retiree side, I realized that the system is filled with invisible tripwires.<\/p>\n
There are tax cliffs that aren\u2019t indexed for inflation. There are work limits that can freeze your benefits. There are breakeven myths that sound smart but are actually mathematically illiterate.<\/p>\n
If a CPA can get tripped up by these rules, I know it\u2019s happening to everyone else. Here are the five dumbest mistakes I see retirees make \u2014 and how I avoided them.<\/p>\n
Most people assume that since they paid taxes on their wages before they went into Social Security, their benefits will be tax-free.<\/p>\n
That\u2019s a logical assumption, but only true if you have very little other income.<\/p>\n
If you have other income sources \u2014 like a pension, withdrawals from a 401(k) or even part-time work \u2014 you\u2019ll likely trigger a tax formula commonly called provisional income<\/a>.<\/p>\n The IRS takes your adjusted gross income<\/a>, adds any tax-free interest and then adds half of your Social Security benefits. If that number is over $25,000 (for single filers) or $32,000 (for those married filing jointly), you owe taxes on up to 50% of your benefits. If it goes over $34,000 for single filers or $44,000 for joint returns, you owe taxes on up to 85% of your benefits.<\/p>\n Here\u2019s the kicker: These thresholds were set in the 1980s and never adjusted for inflation. They were meant to tax the rich, but today, they hit the middle class. Be prepared for this tax bill because it catches many folks off guard every year.<\/p>\n When I told my friends I was thinking about delaying my benefits claim until I hit age 70, they all said the same thing: \u201cBut what if you die?\u201d<\/em><\/p>\n They pulled out napkins and calculated my breakeven age \u2014 the age I\u2019d have to live to for the bigger checks to beat the smaller, early checks. Usually, the math says you have to live to about 80 to come out ahead.<\/p>\n Here\u2019s the problem with that math: It assumes you are going to die young.<\/p>\n According to the Social Security Administration\u2019s actuarial tables<\/a>, if you\u2019re a man who has already made it to 65, your average life expectancy is another 18 years (age 83). If you\u2019re a woman, it is nearly 21 years (age 86).<\/p>\n If you claim early at 62 to \u201cget yours\u201d and then live to 90, you cost yourself tens of thousands of dollars in guaranteed, inflation-protected income. Unless you have a serious health issue, betting on your own early death is a bad financial strategy.<\/p>\n I have a friend who claimed benefits at 63 but kept his consulting gig. He thought he was double-dipping. Then he got a letter from the SSA telling him they were withholding his checks.<\/p>\n He violated the earnings test<\/a>.<\/p>\n In 2026, if you claim benefits before your full retirement age<\/a>, you can only earn $24,480<\/a> a year. For every $2 you earn above that limit, the government withholds $1 of your benefits.<\/p>\n They don\u2019t take it forever. They eventually recalculate your benefit when you hit full retirement age to pay you back, but that doesn\u2019t help you pay the electric bill today. If you plan to keep working, don\u2019t claim early if you don\u2019t have to.<\/p>\n I\u2019m the higher earner in my household. If I claim early, I\u2019m permanently capping the survivor benefit my wife will receive if I die first.<\/p>\n When the higher earner dies, the lower earner bumps up to the higher earner\u2019s check. But if the higher earner took a reduced check at 62, the surviving spouse is stuck with that reduced amount for the rest of their life.<\/p>\n If you are the high earner, you aren\u2019t just delaying for yourself. You\u2019re essentially buying a higher lifetime income for your spouse.<\/p>\n Social Security isn\u2019t a \u201cset it and forget it\u201d income stream.<\/p>\n Every year, there is a cost of living adjustment (COLA). In 2026, it\u2019s 2.8%<\/a>. But Medicare Part B premiums<\/a> also rise, and they\u2019re deducted directly from your check.<\/p>\n2. Obsessing over the breakeven age<\/h2>\n
3. Working too much (the earnings test)<\/h2>\n
4. Stiffing your spouse<\/h2>\n
5. Setting it and forgetting it<\/h2>\n