The Five Social Security Blind Spots Retirees Often Miss
Understand how benefits work before applying, so you don’t lose money for which you qualify.


U.S. workers appear to have a knowledge gap about Social Security, which could lead to money-losing mistakes once program benefits commence.
Exhibit "A" is a recent T. Rowe Price report from Allianz Life Insurance Company of North America, which states that 53% of Americans say: “They do not know much about Social Security or how it will fit into their retirement plan.” Even so, most U.S. workers aren’t seeking professional guidance on Social Security planning, with only 17% who have a financial adviser saying they’ve discussed “maximizing their Social Security income in retirement” with them.
Why is there a disconnect between Americans and adequate knowledge about Social Security? The public isn't all to blame, experts say.

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“Confusion over Social Security doesn’t come from laziness or lack of information, it stems from the system’s complexity,” said Kevin Chancellor, a financial adviser and certified Social Security claiming strategist in Palm Bay, Fla. “Many folks don’t realize how significant the difference can be between claiming at age 62 versus waiting until 70.”
The ideal age to optimize Social Security benefits could fall anywhere within that range; the right timeline is a unique decision for each individual. “The wrong decision could mean thousands of dollars lost throughout retirement and could even increase the risk of depleting a personal investment portfolio too soon,” Chancellor said.
Add in the nuances of spousal benefits, survivor benefits, taxes on Social Security, and the impact of working while collecting benefits, “and it's easy to see why many people get overwhelmed,” Chancellor noted.
Revealing potential Social Security blind spots
One good way to educate yourself on Social Security and its impact on individual retirees is to separate fact from fiction about program benefits and how they work.
Conducting robust due diligence, preferably assisted by a trusted financial advisor, can eliminate negative surprises. During the review phase, be particularly focused on problematic “blind spots” that, left unaddressed, could trigger costly Social Security withdrawal decisions.
These five program factors should be particularly scrutinized, Social Security experts say.
1. Claiming benefits early out of panic, fear, or without knowledge of the consequences
There are times when it may be necessary for you to claim benefits before hitting your full retirement age (FRA). But be sure you know the consequences of claiming benefits early before you make that decision. Many people don't review the rules thoroughly before making official Social Security withdrawal decisions.
Some people don't plan on claiming benefits early, but end up doing so for emotional or unpredictable reasons. In 2025, worries about the solvency of the Social Security trusts that fund Social Security have led some people to claim benefits earlier than planned, out of fears that if they don't, their benefits could be reduced. But the jury's still out on whether the funds will become insolvent and cause benefits to be cut. Yet, the fear of that happening has led to some panicked withdrawal decisions.
“Many retirees claim benefits as early as age 62, often out of fear that Social Security might 'go broke' or simply because they want access to the money right away,” Chancellor said. “Yet claiming early results in a permanent reduction in monthly benefits, up to 30% less than what they’d receive at full retirement age (FRA).”
Even worse, drawing benefits early can put additional pressure on a retiree’s portfolio to cover income gaps, increasing the likelihood of running out of money later in life.
“With longer life expectancies, that’s a real risk,” Chancellor said. “In many cases, delaying benefits — even to age 70 — can create a much stronger and guaranteed income stream, especially for those in good health.”
2. Not factoring in taxes on Social Security Benefits
Many retirees are shocked to learn that up to 85% of their Social Security benefits could be taxed as ordinary income if they have other retirement income, such as pensions or withdrawals from 401(k)s.
Fortunately, the fix is relatively straightforward. “Consult your CPA and financial advisor before claiming benefits,” said Joseph Patrick Roop, CEO at Belmont Capital Advisors, in Charlotte, N.C. “Strategic income planning, such as timing withdrawals or leveraging Roth accounts, can minimize or even eliminate this tax burden. Also, consider Roth IRA conversions before you start Social Security.”
3. Claiming benefits too early while still working
Claiming benefits before hitting your FRA, while still working, can trigger the Social Security earnings test and a penalty — something retirees overlook.
If you claim early, in 2025, the Social Security Administration (SSA) temporarily withholds $1 of benefits for every $2 earned that surpasses $23,400. In the year when a worker reaches their FRA, the penalty is lower; the worker would lose $1 in benefits for every $3 earned that surpasses $62,160.
By waiting to claim benefits until your full retirement age, you can forego the annual earnings test altogether. Once you've hit your FRA, you are free to earn whatever amount you want and the withheld benefits will be returned to you.
“Withheld benefits are restored once you reach full retirement age, but planning prevents surprises,” Roop added.
Roop said that in addition, many people don't know that if they've already filed, they can suspend benefits and restart at a later date.
Suspending allows benefits to grow by about 8% per year until age 70 through delayed retirement credits, which boosts future income if circumstances change.”
4. Underestimating your lifespan
No one can predict how long they'll live, so it's best to plan for all possibilities.
“People are living longer, and for you to enjoy your golden years, you must account for how long they could last,” said Kimberly Gattis, senior vice president for financial planning at UMB Bank.
The Social Security website has a longevity calculator. Gattis advises meeting with your financial advisor to ensure you have a detailed long-term plan.
“That plan should be tailored to your anticipated income and Social Security benefits, with some added cushion for the unexpected expenses,” she said. “Plan to adjust and recalibrate your spending as time goes on. The biggest factor in ensuring you have enough funds to last throughout your retirement is understanding your cash flow and anticipating your needs.”
5. Neglecting to take funds you’re legally owed as an ex-spouse
Too often, Social Security recipients overlook the ability to collect spousal or survivor benefits and don’t make the calculations needed to ensure that they’re collecting the larger portion.
“If you’re 62 or older, were married for 10 or more consecutive years and are currently unmarried (or remarried at age 62 or older), have been divorced for two or more years, and your former spouse is 62 or older, you can receive a benefit based on the earnings of your ex-spouse,” said Eric M. Steffy, founder and CEO at Federal Solutions Report in Daytona Beach, Florida.
You can contact the Social Security Administration to determine if you're better off claiming your Social Security or spousal, or survivor benefits.
Take advantage of SSA planning tools
To ensure you have the best and most accurate prediction of anticipated Social Security benefits before applying, leverage the help offered by the Social Security Administration.
“Beneficiaries should use safe and approved tools like the Social Security Administration's online benefit calculators,” Gattis said.
Tools such as the My Social Security Retirement Estimate and Early or Late Retirement Calculator have secure access to your account to ensure your benefits estimate is accurate. “These tools also let you see how different scenarios like lifespan and retirement age could affect your benefits amount,” Gattis said.
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A former Wall Street bond trader, Brian O’Connell is the author of two books: “The 401k Millionaire” and “CNBC’s Creating Wealth.” He's written for national finance publications such as TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, Fox News and others. With 20 years of experience covering business news and trends, he believes education is the best gift a financial consumer can receive – and brings that philosophy to his work. Brian is a graduate of the University of Massachusetts, and currently resides in Palmas del Mar, Puerto Rico during the winter, and in Bucks County, Pa., when Mother Nature cooperates.
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