3 Reasons You Might End Up With Less Social Security Than You Want

Key Points

• Many people know that claiming Social Security early will result in reduced benefits.

• Your work history could also leave you with a monthly check you're unhappy with.

• It's important to understand how Social Security works so you can take steps to lock in larger benefits for retirement.

• The $23,760 Social Security bonus most retirees completely overlook ›

It's important to save well for retirement so you end up with enough income to do the things you've always wanted to. But even if you manage to kick off retirement with a nest egg you're happy with, you might still end up relying pretty heavily on Social Security to cover your senior expenses. That's why it's important to try to lock in the most generous monthly paycheck you can.

Now, you may be aware that if you sign up for Social Security before reaching full retirement age, your monthly benefits will be reduced. You can claim Social Security as early as age 62. But for each month you sign up before full retirement age, which is 67 for anyone born in 1960 or later, you'll lose a portion of your monthly checks permanently.

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But filing early isn't the only reason you might end up with less Social Security than expected. Here are three more reasons why your monthly checks might end up disappointing you.

1. You don't work the full 35 years

Your Social Security benefits in retirement are based on your personal earnings record. They're also based on your 35 highest-paid years in the workforce. But if you don't have a full 35-year work history, then for each year there's no income on record for you, you'll have a $0 factored in.

Too many of those $0 years could lower your monthly benefits substantially. So if you've reached your early 60s and you don't have a 35-year work history, you may want to hold off on retiring and put in a few extra years on the job. Not only could it lead to larger Social Security benefits, but it could make it possible to boost your IRA or 401(k) nicely.

2. You don't work full-time during your career

Maybe you're planning to work for 35 years, but you're unable to find full-time hours in your line of work. The less money you earn while you're working, the less Social Security you can expect to receive in retirement.

If you're finding it difficult to find a full-time role in your industry, consider supplementing your income with a side job. As long as you report your wages, they should count toward your future Social Security benefits. Plus, if you're able to earn more, that could spell the difference between being able to contribute to a retirement savings plan or not.

3. Your earnings record has errors

Your Social Security benefits are based on the wages your employers report to the Social Security Administration (SSA). But if an employer fails to report your wages correctly, it could result in lower benefits.

There's an easy way around this, though. Create an account on the SSA's website and review your annual earnings statements. If you see that your wages have been underreported, you can work to get those errors corrected so you're not left with less money as a retiree.

It's natural to depend on Social Security in retirement. But it's also important to understand what goes into your monthly benefits. That way, you can take steps to lock in larger checks -- and enjoy more financial freedom once your career comes to an end.

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