Social Security Benefits: Top 3 Surprising Risks for Retirees

Surprising Risks to Your Social Security Benefits

Social Security benefits are an essential component of retirement income, but many retirees are unaware of certain risks that could jeopardize their financial security. Here are three surprising ways you could lose some of your Social Security benefits:

1. Excess Earnings Penalties

Many retirees do not realize that earning above a certain threshold can result in a reduction of their Social Security benefits. If you return to work and exceed the allowed earning limit, the government may withhold a portion of your benefits, impacting your income.

2. Taxation of Benefits

Another unexpected risk comes from taxes on Social Security benefits. If your combined income exceeds a certain level, your benefits may become taxable. This could lead to a higher tax bill and decreased net income.

3. Not Delaying Benefits

Opting to take Social Security benefits before full retirement age may seem tempting, but it can significantly reduce your monthly payout. Delaying benefits can increase the amount you receive over your lifetime, making this a critical decision for financial planning.

Understanding these risks is key to maintaining your financial health during retirement. Stay informed and consider strategies to safeguard your Social Security income.