5 Social Security Mistakes That Cost Retirees the Most

Social Security's retirement trust fund is projected to run dry in 2032. After that, payroll taxes cover about 78% of scheduled benefits unless Congress acts. That makes the decisions below worth more, not less — because the choices you control are the ones that decide whether your own check is as large as it can be.

Mistake 1: Claiming at 62 because you can

Sixty-two is the earliest age, not the default age. If you were born in 1960 or later, your full retirement age is 67. Claiming at 62 cuts your check by 30%, and that cut is permanent — it does not go back up at 67.

Waiting past 67 works the other way: your benefit grows about 8% a year until 70. Wait all the way and you collect roughly 24% more, every month, for life, with cost-of-living raises applied on top of the bigger number.

The same worker, three different choices: claim at 62 and get $700 for every $1,000 you would have had at 67. Claim at 67 and get the full $1,000. Claim at 70 and get $1,240.

To be fair: claiming early is the right call for plenty of people — poor health, no other income, a job that ended. The mistake is not claiming at 62. It is claiming at 62 without ever seeing that arithmetic. We walk through the full decision in When to Claim Social Security: 62, 67, or 70.

Mistake 2: Forgetting that one of you dies first

This is the expensive one, and almost nobody is told about it. When one spouse dies, the survivor does not keep both checks. They keep the larger of the two. So whatever the higher earner locked in becomes the survivor's income, possibly for twenty years or more.

Say the higher earner would get $2,400 at 67 but claims at 62 instead. Their check becomes about $1,680. They pass away at 74. The surviving spouse now lives on $1,680 a month — not $2,400 — for the rest of their life. Over twenty years that difference is roughly $173,000, before counting the cost-of-living raises that would have compounded on the bigger number.

The move: in most married couples the higher earner should think hardest about waiting, and the lower earner can often claim earlier without doing damage. It is one conversation, and it is worth having before either of you files. There is more on this in What Happens to Social Security When a Spouse Dies.

Mistake 3: Collecting early while you're still working

If you claim before your full retirement age and keep earning a paycheck, Social Security holds back part of your benefit. In 2026, if you are under full retirement age all year, you can earn $24,480 before they hold back $1 for every $2 over. In the year you reach full retirement age, the limit rises to $65,160 with $1 held back for every $3 over. At full retirement age or older, there is no limit at all.

Here is the part nobody explains: that money is not gone forever. When you hit full retirement age they recalculate and raise your monthly check to give it back over time. It is a delay, not a penalty. But it is still a cash-flow problem in the years you did not plan for it. People quit jobs over this because they thought the money was lost for good.

Mistake 4: Assuming Social Security isn't taxed

Up to 85% of your benefit can be taxable income federally, depending on what else you bring in. The thresholds were set in 1984 and have never been adjusted for inflation — not once. A benefit that was not taxed for your parents gets taxed for you, at the same dollar threshold, forty years later.

Which bucket you pull retirement income from, and in what order, changes the number — and that part is controllable. California does not tax Social Security at the state level; this is the federal side. The full picture, including the provisional-income math, is in Is Social Security Taxable in California?

Mistake 5: Paying your Medicare premium when the state would pay it for you

Medicare Part B costs $202.90 a month in 2026, and for most people it comes straight out of the Social Security check before it ever arrives. California has Medicare Savings Programs, including one called QMB, that pay that premium for you — and often the deductibles and copays too. Hundreds of thousands of people who qualify have never applied, usually because nobody told them it existed.

If you qualify, that is $2,434 a year back in your check just from the Part B premium being covered, before counting deductibles and copays. Roughly who qualifies in 2026: one person at about $1,330 a month of income, a couple at about $1,804. Savings can count too, and there are related programs with higher limits if you are just over. The rules changed in January 2026 and they are genuinely confusing — do not rule yourself out without asking.

What to do with this

Pull your Social Security statement at ssa.gov/myaccount. It is free and takes about ten minutes. It shows your actual number at 62, at 67, and at 70. Most people have never looked at it.

Then, if you want, bring it to us. We will sit down with you for an hour and go through these five in order against your real numbers. No charge, and you do not need to buy anything for it to be worth your time. If you are already doing it right, we will tell you that, and you will have lost an hour and gained certainty. Call (760) 642-1892, email [email protected], or use our contact page. Se habla español.

Important disclosures

Sources: 2026 OASDI Trustees Report (SSA) · SSA 2026 fact sheet for the cost-of-living adjustment, earnings test and full retirement age · CMS 2026 Part B premium and deductible · California DHCS and California Health Advocates, 2026 Medicare Savings Program limits · IRS Publication 915. Figures are for 2026 and change annually. Eligibility rules are simplified here.

This page is educational only. It is not tax, legal, or financial advice, and your situation decides the answer, not this page.

My Legacy Management is not connected with or endorsed by the U.S. government, the Social Security Administration, or the federal Medicare program.