Social Security is the largest source of retirement income for most Americans — the average benefit is $2,071/month in 2026, or nearly $25,000 per year. Yet millions of retirees make avoidable decisions that permanently reduce those benefits by tens of thousands of dollars. Here are the five most costly mistakes and how to avoid them.
You can claim Social Security as early as age 62, but doing so permanently reduces your monthly benefit. For every year you claim before your full retirement age (FRA), your benefit is reduced by 6-8%. Claim at 62 instead of 67 and your benefit is cut by approximately 30% — permanently, for the rest of your life.
| Claiming Age | Monthly Benefit | Annual Benefit | Lifetime Loss vs Age 70* |
|---|---|---|---|
| 62 (earliest) | $1,450 | $17,400 | ~$150,000 |
| 65 | $1,800 | $21,600 | ~$80,000 |
| 67 (FRA) | $2,071 | $24,852 | ~$30,000 |
| 70 (maximum) | $2,570 | $30,840 | — |
*Assumes average life expectancy of 85. Based on 2026 average benefit of $2,071 at FRA.
Delaying from 62 to 70 increases your monthly benefit by 77%. For someone living to 85, claiming at 70 instead of 62 results in significantly more lifetime income despite receiving benefits for fewer years.
When early claiming makes sense: If you have serious health issues or a shortened life expectancy, claiming early may be rational. The break-even point between claiming at 62 vs 70 is typically around age 80-82.
Married couples have powerful Social Security optimization options that most people never use. A spouse who earned less (or nothing) can claim up to 50% of the higher-earning spouse's FRA benefit — without reducing the primary earner's benefit at all.
The optimal strategy for many couples: The lower-earning spouse claims early (to bring in some income), while the higher-earning spouse delays until 70 to maximize the larger check. When the higher earner dies, the surviving spouse receives the larger of the two benefits — making the delay even more valuable.
A widow or widower can claim survivor benefits as early as age 60. Survivor benefits can be up to 100% of the deceased spouse's benefit. Coordinating these benefits carefully can mean $50,000-$100,000 more in lifetime income for a couple.
Many people assume FRA is 65 — it's not. Full retirement age depends on your birth year:
| Birth Year | Full Retirement Age |
|---|---|
| 1954 or earlier | 66 |
| 1955 | 66 years, 2 months |
| 1956 | 66 years, 4 months |
| 1957 | 66 years, 6 months |
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 |
Claiming one month before your FRA reduces your benefit. Many retirees don't realize their FRA is 67, not 65, and inadvertently claim "early" without realizing it.
Up to 85% of your Social Security benefits may be taxable at the federal level, depending on your combined income. Many retirees are surprised by this.
| Combined Income (Single) | SS Benefit Taxable |
|---|---|
| Below $25,000 | 0% |
| $25,000 – $34,000 | Up to 50% |
| Above $34,000 | Up to 85% |
"Combined income" = adjusted gross income + non-taxable interest + half of Social Security benefits. IRA withdrawals, pension income, and part-time work all count. Eight states also still tax Social Security benefits in 2026: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont.
The fix: Consider Roth conversions before claiming Social Security to reduce future taxable income. Strategic withdrawal sequencing can keep you in the 0% Social Security tax zone.
If you claim Social Security before your full retirement age and continue working, your benefits are reduced if you earn above certain thresholds. In 2026, if you're under FRA for the full year, $1 in benefits is withheld for every $2 you earn above $22,320.
The good news: these withheld benefits aren't lost permanently. After you reach FRA, your monthly benefit is recalculated upward to account for the months benefits were withheld. But the short-term cash flow impact catches many retirees off guard.
After reaching FRA, you can earn any amount with no benefit reduction — the earnings test no longer applies.
Key takeaway: If you plan to continue working, seriously consider delaying Social Security until at least your full retirement age. You avoid the earnings penalty and lock in a permanently higher benefit.
Our retirement calculator lets you factor in Social Security income to see exactly how much you need from savings.
Use the Retirement Calculator →The five biggest Social Security mistakes are claiming too early, not coordinating spousal benefits, not knowing your FRA, ignoring benefit taxation, and working while claiming before FRA. The most impactful single decision is claiming age — delaying from 62 to 70 can increase lifetime benefits by $100,000+ for someone with average life expectancy. Run the numbers for your specific situation before making a permanent decision.
For informational and educational purposes only. Social Security rules are complex and subject to change. Consult a financial planner or Social Security Administration directly for personalized guidance.