3 Social Security Oversights That Could Cost You Over $40,000
Social Security will probably be an important income source for you during retirement, and so it's important to get as much money as you can from it. But these oversights on your part could easily leave you $40,000 poorer as a senior than you need to be.
You're entitled to your full monthly benefit, based on your earnings history, once you reach full retirement age, or FRA. FRA hinges on your year of birth, and if you were born in 1955, it's 66 and two months. From there, it increases by two months per year of birth until it maxes out at age 67 for anyone born in 1960 or later. Meanwhile, you're allowed to sign up for benefits as early as age 62, but doing so could cause your monthly income to take a major hit -- a hit you'll likely regret down the line.
These days, the average senior on Social Security collects $1,543 a month. If you were to file at age 62 with an FRA of 67, you'd shrink a benefit that size down to $1,080. That's a hit of $463 a month. To be fair, some of that lost income will be offset by the fact that you'll collect Social Security for five extra years. But if you live beyond your late 70s, you'll still end up having lost income by virtue of filing early. In fact, if you live until age 86, you'll end up down just over $40,000 in lifetime benefits.
Source Fool.com
