Incorrect earnings record
Your Social Security benefits are calculated based on your lifetime earnings, specifically the average of your highest 35 years of earnings.
Errors in your earnings record can occur for various reasons, including clerical mistakes, incorrect reporting by your employer, or even identity theft. For instance, if your employer reports your earnings under the wrong Social Security number, your record will show lower earnings than you actually had, which can significantly reduce your benefits.
It’s crucial to regularly check your Social Security statement, which you can do online through the Social Security Administration’s (SSA) website. If you spot a discrepancy, you should contact the SSA immediately to correct your record.
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Read MoreApplying for the wrong program
Social Security offers several programs, each serving different needs such as retirement benefits, disability benefits, and survivors’ benefits. Applying for the wrong program can trigger a denial of benefits or getting less than you deserve.
For example, some people mistakenly apply for Supplemental Security Income (SSI) instead of Social Security Disability Insurance (SSDI). While both programs offer financial assistance to disabled individuals, they have different eligibility requirements and payment amounts. SSDI is based on your work history and earnings, whereas SSI is need-based and intended for individuals with limited income and resources. Applying for SSI when you are eligible for SSDI could result in lower benefits, as SSI payments are generally lower than SSDI payments.
Life changes
Life happens: Marriage, divorce, the death of a spouse, or the birth of a child. These can all significantly affect your Social Security payments.
For instance, if you get married, your benefits might change depending on whether you’re receiving your own Social Security benefits or spousal benefits. In the case of divorce, you may be eligible for spousal benefits based on your ex-spouse’s earnings. However, failing to report these changes to the SSA can result in incorrect payments.
Overpayments might occur if you continue to receive benefits you’re no longer eligible for, while underpayments can happen if you don’t apply for benefits you’re now entitled to. For example, widows or widowers may be eligible for survivor benefits, which are generally higher than the benefits they were receiving on their own record.
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Learn MoreGet what you’re entitled to
Expecting the government to get it right doesn’t always work. Here are steps you can take to maximize your benefits and correct any errors:
Regularly monitor your Social Security account: Create an online account with the SSA to access your Social Security Statement, track your earnings record, and estimate your benefits. Regular monitoring can help you spot and correct errors early.
Review your earnings record annually: Check your earnings record at least once a year to ensure all your income is accurately reported. Report any discrepancies to the SSA immediately to prevent long-term issues.
Understand the impact of your retirement age: Your retirement age significantly affects your benefit amount. Familiarize yourself with how retiring early or delaying retirement impacts your benefits, and plan accordingly to maximize your payments.
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