The Three Costly Social Security Mistakes You May Not Know How to Fix

Social security remains one of the most important sources of retirement income for millions of Americans. However, because the program is complex and often misunderstood, many retirees inadvertently make decisions that significantly reduce their lifetime benefits. Understanding these common errors—and more importantly, how to fix social security mistakes—can help protect your financial security during your retirement years.

Why Over-Dependence on Social Security Creates Retirement Risk

The first major error is assuming that social security will provide substantially more income than it realistically can. The program is designed to replace approximately 40% of pre-retirement earnings, yet many people expect their benefits to cover most or all of their living expenses. This fundamental miscalculation creates dangerous financial exposure.

If you haven’t accumulated significant retirement savings through employer-sponsored plans like a 401(k) or personal IRAs, you’re setting yourself up for serious hardship. The gap between expected and actual income can force difficult choices—downsizing your home, relocating, or drastically cutting your standard of living within the first months of retirement. Experts recommend beginning to save for retirement as early as possible to build a diversified income foundation that social security alone cannot provide.

Spousal Benefit Coordination: A Critical Step Most Couples Skip

The second costly mistake involves failing to strategize with your spouse about claiming decisions. Social security rules create interdependencies that many married couples overlook entirely. For instance, if you’re the higher earner, your spouse cannot claim spousal benefits until you’ve filed for your own retirement benefits—a timing decision that affects both of your lifetime payouts.

Additionally, your claiming age directly impacts survivor benefits. If a higher-earning spouse claims benefits early to access money sooner, this permanently reduces the death benefit available to protect the surviving spouse. To fix social security outcomes for both partners, couples need to think beyond individual needs and consider which claiming strategy maximizes combined lifetime income while protecting against spousal vulnerability.

The COLA Illusion: How Inflation Erodes Social Security’s Protection

Many retirees mistakenly believe that Cost-of-Living Adjustments (COLAs) will preserve their purchasing power against inflation. This assumption overlooks a critical reality: the COLA formula often fails to keep pace with actual expenses faced by retirees, particularly in high-cost areas like healthcare and housing.

Research from the Senior Citizens League demonstrates that social security benefits have lost approximately 20% of their buying power since 2010—a trend that continues as inflation outpaces annual adjustments. Because the COLA calculation doesn’t fully account for where retirees actually spend their money, your benefits gradually purchase less each year. To address this gap, you must proactively adjust your annual spending based on what your actual budget allows, reduce debt obligations, and avoid withdrawing excessive amounts from retirement accounts that could derail long-term financial stability.

Simple Steps to Fix Your Social Security Strategy

Correcting these errors requires a multi-layered approach. Start by honestly assessing whether your retirement savings are sufficient to supplement social security benefits to a comfortable level. If gaps exist, either increase savings immediately or adjust lifestyle expectations before retiring.

Next, couples should schedule a dedicated conversation about their claiming strategy, ideally with a financial advisor familiar with social security rules. Understanding how individual claiming decisions ripple through both your benefits and survivor protections removes uncertainty from this critical choice.

Finally, build inflation awareness into your retirement budget planning. Rather than relying on COLAs to maintain purchasing power, view them as a helpful but insufficient safeguard. Create a spending plan that accounts for healthcare inflation in particular, and maintain enough flexibility to reduce discretionary spending if inflation accelerates.

By recognizing these three mistakes and taking deliberate action to fix social security outcomes, you can move from reactionary retirement management to a confident financial strategy built on realistic expectations and coordinated decision-making.