Avoiding Social Security Mistakes

We write in Retirement Watch a lot about strategies for claiming Social Security retirement benefits. That’s because you have choices, and married couples have a lot of choices. The difference between the optimum choice and other choices can amount to tens of thousands of dollar or more over your lifetime. Unfortunately, people make a lot of mistakes about this. Take a look at these survey results about Social Security. Many people think they know about Social Security, but they don’t. It’s one of the most important decisions you’ll make about retirement finances. Don’t be one of those people who think they know what they’re doing but really don’t.

The link is this: research shows the majority of Americans  claim Social Security at  62 or within a few months of retirement, whichever comes later, but don’t begin spending their 401(k)s and IRAs before age 70 ½,  when required minimum distributions  from traditional pre-tax accounts must, by law, begin.  “What’s becoming really apparent, is that people would be better off spending some of the 401(k) money (early in retirement) to defer the date they claim Social Security. Maybe they can’t defer all the way to 70, but they can defer some,” says Jones.