Social Security serves as a critical financial safety net for many Americans, providing retirement, disability, and survivor benefits.
However, understanding how it works and making accurate projections of your payments can be complex.
Each month, a fixed percentage of an American worker’s paycheck is typically withheld for Social Security taxes so he or she can receive benefits later in life.
These contributions help ensure that workers receive retirement income, disability benefits, and survivor benefits as needed.
Payment amounts are based on the employee’s lifetime earnings, their birth year, and when they begin receiving benefits.
Because Social Security can be a complicated topic, Americans often make common mistakes when collecting their money.
Read more about Social Security
To help prevent American workers from making such mistakes, The US Sun spoke exclusively with financial expert Shalae Morgan.
Morgan, a content creator and entrepreneur, shares financial insights and advice with her 514,000+ followers on YouTube (@shalaemorgan).
ESTIMATION ERROR
The first common mistake Morgan mentioned regarding Social Security payments is relying too much on projections.
He noted that for Americans who are not currently receiving their benefits, their Social Security statements only show estimates of future benefits.
Projections assume employees will continue to contribute their current income until they reach full retirement age, Morgan said.
“If you decide to retire early and stop making contributions, your actual benefits in retirement could be much lower than the estimates project,” he said.
The age at which Americans begin receiving benefits has a significant impact on how much money they qualify for, so beneficiaries who retire early can lose thousands of dollars per year.
Americans can start collecting their Social Security checks at age 62 if they have worked and paid Social Security taxes for at least 10 years, according to the administration.
“To maximize your Social Security payments, delaying your collection is an excellent strategy,” Morgan previously told The US Sun.
He shared that those who retire at age 62 this year will be able to receive a maximum of $2,710 per month.
Americans who retire at their full retirement age in 2024 can receive up to $3,822 in benefits.
Those who extend the start of their retirement until age 70 can receive even more: up to $4,873 each month.
This is $2,163 more per month than those who retire at age 62 receive, or up to $25,956 more per year.
“So the longer you wait to collect your Social Security, the better off you’ll be,” Morgan said.
Who can receive Social Security benefits?
In addition to retired Americans, the following categories of people are eligible to receive Social Security payments:
- Someone with a qualified disability
- A spouse or child of someone who receives benefits
- A divorced spouse of someone who receives or is eligible to receive
Social Security - A spouse or child of a deceased worker
- A divorced spouse of a deceased worker
- A dependent parent of a deceased worker
Source: Social Security Administration
EXPERT ADVANTAGE
Morgan shared a second common mistake Americans make when it comes to Social Security, which is relying too much on information obtained through a quick Google search.
He explained that such information is usually general in nature and probably does not apply to the individual situation of most Americans.
“Since life situations may differ, it is necessary to have a personalized relationship
“This is an approach that can help you optimize your retirement,” Morgan said.
“It’s important to keep in mind that Social Security is not a one-size-fits-all experience and can be complex.”
The expert recommended that Social Security beneficiaries seek professional advice to make more informed decisions about their benefits.
If you decide to retire early and stop making contributions, your actual retirement benefits could be much lower than estimated.
Shalae Morgan
For example, Social Security seminars and workshops are often free and virtual and can provide key information about benefits.
Morgan noted that Americans can also use several calculators available online to estimate their benefits.
“These calculators allow you to input different scenarios, including having no Social Security income, which can give you an idea of whether you need to start downsizing as you get closer to retirement,” he shared.
The Social Security Administration also has a variety of calculation tools available, such as a retirement age calculator, a life expectancy calculator, and a spousal benefits calculator.
Using these online services and tools can help ensure that Americans know what to expect when it’s time to start receiving their Social Security benefits.
The US Sun previously spoke to Morgan about other financial issues.
She paid off $173,000 in student loans in less than two years and shared seven tips on how others can do the same.
Morgan also discussed tips for getting free money and how to find alternative sources of income.
