Social Security Errors That Can Cost You, You could be in for a surprise if you don't check your complete earnings history closely. Social Security Errors That Can Cost You Big-Time, A few weeks ago, I reported on four Social Security errors that can cost you thousands of dollars. The ideas came from two of the nation's foremost experts on Social Security: Andy Landis, author of "Social Security: The Inside Story," and Jon Peterson, who wrote "Social Security for Dummies." Between Andy, Jon, and I, we came up with enough errors to fill two posts, so here's my second installment on Social Security mistakes to avoid.
Mistake #1: Not paying attention to your earnings record
"The most common error I see is people thinking that their Social Security is based on their last 10 years, or their best 10 years, of earnings," Landis said. "Even many financial professionals believe this."
In fact, your Social Security income is based on a 35-year average of all your earnings. If you've worked for fewer than 35 years, then Social Security plugs in zeros for the missing years. This drags down your average earnings and, as a result, also reduces your benefits. So you'll want to check your earnings history to make sure you have at least 35 years of covered earnings. If you don't, you may want to work for a few more years so that your 35-year average is calculated with no zeros plugged in. You can now check your earnings history online.
Mistake #1: Not paying attention to your earnings record
"The most common error I see is people thinking that their Social Security is based on their last 10 years, or their best 10 years, of earnings," Landis said. "Even many financial professionals believe this."
In fact, your Social Security income is based on a 35-year average of all your earnings. If you've worked for fewer than 35 years, then Social Security plugs in zeros for the missing years. This drags down your average earnings and, as a result, also reduces your benefits. So you'll want to check your earnings history to make sure you have at least 35 years of covered earnings. If you don't, you may want to work for a few more years so that your 35-year average is calculated with no zeros plugged in. You can now check your earnings history online.
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