3 Social Security Mistakes That Could Cost You a Fortune
How much do you plan to rely on Social Security in retirement? If you're behind on retirement savings, you'll probably wind up depending on those benefits a lot. As such, you really can't afford to do anything to compromise them. And that's why it's crucial that you avoid the following mistakes.
Hiding income you've earned won't just get you in trouble with the IRS; it could also result in a lower Social Security benefit during retirement. The monthly benefit you're entitled to is calculated based on your earnings during your 35 highest-paid years on the job. Now, let's say that for the latter half of your career, you do some work on the side and opt to get paid in cash to avoid reporting that income. Your motivation might be to save on taxes, but in doing so, you'll also have a lower annual income added to your Social Security earnings record which, in turn, will result in a lower retirement benefit.
A better bet? Report the money you earn. Not only will it help you avoid costly IRS penalties (or other legal repercussions), but it could also help ensure that you have a higher Social Security benefit to look forward to.
Source Fool.com
