Even though wealthy retirees may not rely on Social Security benefits as heavily as others, the decisions they make about when and how to claim can still have major financial consequences.
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Here are four common Social Security mistakes even high-net-worth retirees make. And while you’re double checking your benefits, here are some Social Security decisions that are harder to undo.
Not Understanding How Benefits Are Calculated
Social Security benefits are calculated based on your highest 35 years of earnings, adjusted for inflation. So if you had a big jump in income compared to 33 or 34 years ago, working a couple extra years could bump your average up and increase what you receive.
But if you’ve been a pretty high earner your whole career, this probably doesn’t apply to you. That’s because Social Security only counts earnings up to a certain limit each year. For example, in 2025 that cap was. In other words, if you’ve been hitting those limits for most of your career, working longer and delaying your retirement most likely won’t push your benefit any higher, because there’s nothing left to improve in your average.
But regardless of your income, you’ll still want to check your earnings record via SSA.gov to ensure there aren’t any missing years or discrepancies that can impact your benefit calculation.
Explore More: How Working Part Time in Retirement Can Quietly Change Your Social Security Benefits
Claiming Benefits Too Early
Another big mistake some wealthy retirees make with their Social Security benefits is claiming them too early.
Today’s full retirement age is 67, and at that age, your Social Security benefit is paid at its full amount. But if you claim your benefits earlier (such as at 62), it will permanently lower your monthly payment, since those benefits are expected to be paid over a longer period of time.
On the other hand, your potential monthly benefit increases every month that you delay Social Security past your full retirement age until you reach 70 years old.
Overlooking Tax Implications
If you’re eligible to receive the maximum Social Security benefit, you could owe federal income taxes on as much as 85% of your Social Security benefits. If you expect to owe taxes, you can contact the SSA to request withholding directly from your monthly Social Security payments. The IRS allows four withholding options: 7%, 10%, 12%, or 22%.
Not Considering Longevity and Inflation
According to a 2025 survey by Allianz Life, 64% of Americans are more afraid of running out of money in retirement than of death itself. Even if you’re wealthy, it’s still possible to outlive your savings if you’re not careful. To prevent that from happening, consider meeting with a financial advisor or planner who can help you create a withdrawal strategy so that your assets last as long as you do.
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This article originally appeared on GOBankingRates.com: 4 Social Security Mistakes Even Wealthy Retirees Make
