Just prior to age 67, the full retirement age for those born after 1960, the key to protecting retirement benefits is to be informed about the rules, timing, and strategies to secure the benefits being received. With just one mistake, benefits will be reduced substantially every year for the rest of their lifetime, affecting about 78% of American adults, who cannot correctly identify their full retirement age, according to a 2025 Nationwide Retirement Institute survey.
The choice of when and how to draw Social Security benefits is more than just a personal preference; it is an investment milestone that can equate to many thousands of dollars in one’s lifetime. The fact that 2026 has rolled in with changes in the cost of living, Medicare premiums, and taxes means that the situation has never been more urgent.
1. Early Claiming Before Full Retirement Age Without Need
Filing prior to full retirement age (FRA) could reduce benefits by as much as 30%, which will last throughout life. Many people begin collecting their social security benefits early, fearing that social security will “run out,” but as Loren Paul Fiffik, CFP, points out, even in a worst-case scenario, there could be a 20% to 25% reduction of benefits at most. Unless there are cash flow issues, deferment until after FRA, even until age 70, could result in even more income.
2. Misunderstanding the Earnings Test
Benefits may be reduced for people who file claims before FRA and remain employed. Starting in 2026, individuals who make more than $24,480 before FRA must have $1 deducted for every $2 earned above that threshold. This means that if an eligible person earns compensation of $40,000, their yearly benefit would decrease by $7,760. Although these deductions are refundable, it may cause short-term cash flow problems that must be considered.
3. Ignoring Spousal Benefit Strategies
Spousal benefits can collect up to 50% of the greater benefit at FRA, but many couples do not synchronize their claims. Fiffik recommends that the greater benefit application is delayed until the lower benefit recipient collects early retirement benefits, potentially gaining tens of thousands of dollars over a lifetime benefit. However, spousal benefits do not accrue past FRA dates.
4. Overlooking Survivor Benefits
Benefits for a survivor can be up to 100% of a deceased spouse’s benefit if taken at the survivor’s full retirement age. However, if taken earlier, it will be reduced to a maximum of 71.5% benefits if taken at age 60. Receipt of a higher earner’s retirement benefit can be postponed in order to maximize a survivor benefit for a household with a large difference in earnings.
5. Failure to Provide for Taxes on Benefits
Effective 2026, a new deduction of as much as $6,000 is available for taxpayers 65+. This would offset Social Security taxes for many individuals. It requires income full deduction for singles with MAGI not over $75,000 and joint filers with MAGI not over $150,000. Failure to consider tax implications when making Social Security benefit claiming choices may result in tax-related shocks.
6. Medicare Enrollment Deadlines
There could be a costly assumption about Medicare enrollment. Penalties for late enrollment in Medicare Part B could be as high as an additional 10% of the premium for every 12 months past the eligibility date, for life. There could be a further penalty of 1% of the national base premium for every month past the date of eligibility without creditable coverage for Medicare Part D.
7. Misjudging the Break-Even Age
The break-even age, usually between 78 and 81 years old, is where benefits for early retirement equal benefits for postponement. Beneficiaries likely to survive beyond this point might find greater incentives to postpone. For one to postpone from ages 67 to 70, there is an increase of 24% for monthly retirement benefits.
8. Letting Fear Motivate Early Claims
A 2025 Schroders study found that 36% of non-retirees intended to claim claims based on the anticipated insolvency of Social Security, even knowing that 70% of claimants believe postponement results in higher payments. Acting on fear affects future security as people are living longer and the cost of healthcare is on the rise.
9. Ignoring 2026 Changes in COLA and Medicare Premiums
For the year 2026, the COLA impacting Social Security benefits is pegged at 2.8%, which will translate to an average benefit increase of $56. However, the premium for Medicare Part B jumped by 9.7% to $202.90. This is a form of preparation for the changes in the benefits arena so that the benefit gain is not nullified by increased healthcare expenses.
So, for people turning 67 soon, Social Security issues extend far beyond mere bureaucracy to major financial milestones. By steered clear of these nine mistakes, seniors could easily strike a balance between Social Security benefits and their own needs. This is particularly important in light of new developments in Social Security policy in 2026 and beyond.
