Many people use social security programs to get financial backup, but they could end up losing money due to lack of planning and accurate information. If you want to really benefit from social security, you should know how the program works. There are mistakes that you should avoid to prevent you from losing many thousands of dollars annually. Here are things you should do:
- Verify earnings: Benefits of social security are adjusted based on your verified earnings records. Your benefits can be reduced if your earnings are not accurately reported. Be aware that employers could intentionally lower their social security tax by not issuing W-2 form and you get the form 1099 instead.
- Check types of benefits: Many people don’t apply for the right benefits early enough, because they are unaware of them. They may not know that specific benefits exist or they think that they don’t qualify for specific benefits. As an example, surviving spouses may not know that they can apply on the records of the deceased worker’s. Children who become disabled could also receive benefits using the social security problems. Children could also benefit from social security programs, even if their parents don’t legally marry. Check social security guidelines and ask consultants about benefits that you can use.
- Apply at the right time: To ensure that you get spouse’s and retirement benefits, make sure that you pay at the same month that application is filed. Continue to the payment until you reach the full retirement age to get the full benefits. There’s a six-month limit on any retroactive benefit for most social security plans. They can be paid up to 12 months from the moment the application is filed. This depends on when you meet requirements needed for disability. If you wait longer, it is possible that you will lose the entire monthly benefits for each month filing is delayed.
- Check whether you have some benefits due: Before retirement, you can’t go beyond specific earning limit, while you receive benefits. If the limit is exceeded, even only slightly, there will be some benefits due. As an example, if you earn $2000 more than the allowable limit, half that amount or $1000 is withheld. If your monthly benefits are $500, then the first two months of your benefits can be withheld. To enjoy maximum financial benefits, you should apply as soon as possible. Be aware that for each month your benefits are received before the retirement age is reached, you could permanently lose some benefits.
- Apply for beyond the full retirement age: You get maximum benefits if you apply for full retirement age. If you are confident about your financial situations and health situation, you could apply for a few years beyond the full retirement age. For each 12-month delay in receiving benefits, the increase of benefits could reach up to 8 percent. So, if you delay for four years, your total benefits can increase by a third. Make a careful and thorough calculation on how much you will get from delaying to get full retirement benefits for specific number of years.