If you make these mistakes, say goodbye to your Social Security benefits in May 2025

As May 2025 approaches, it’s crucial for Social Security beneficiaries to be aware of potential pitfalls that could jeopardize their monthly payments.

Two significant issues have emerged that could affect your benefits if not addressed promptly.

Defaulted student loans may lead to benefit garnishment

Starting May 5, 2025, the U.S. Department of Education will resume collections on defaulted federal student loans, a policy shift after a five-year pause due to the COVID-19 pandemic.

This resumption includes the enforcement of the Treasury Offset Program, which allows for the garnishment of federal payments, including Social Security benefits, to recover defaulted debts.

If you’re in default on a federal student loan, up to 15% of your monthly Social Security benefits could be withheld. For example, if you receive $1,500 per month, up to $225 could be garnished, potentially reducing your annual benefits by approximately $2,500.

Steps to protect your benefits:

• Enter into a repayment agreement: Contact your loan servicer to discuss options for repayment or rehabilitation.
• Apply for hardship status: If you’re facing financial difficulties, you may qualify for a hardship exemption. Submit the necessary documentation to your loan servicer.
• Utilize the fresh start program: This initiative allows you to bring your loan out of default status, potentially stopping garnishments. Check your eligibility and apply through the Department of Education.

Claiming Social Security Benefits before full retirement age

Another common mistake is claiming Social Security benefits before reaching your Full Retirement Age (FRA).

While you can start receiving benefits at age 62, doing so results in a permanent reduction in your monthly payments. For instance, if your FRA is 67 and you claim at 62, your monthly benefit could be reduced by about 30%.

Considerations before claiming early:

• Evaluate your financial needs: Assess whether you can afford to delay claiming benefits until your FRA.
• Understand the impact on lifetime benefits: Claiming early reduces your monthly payments for life, which can significantly affect your total lifetime benefits.
• Consult with a financial advisor: Seek professional advice to determine the best time to claim based on your personal circumstances.

By being proactive and informed, you can avoid these common mistakes and ensure that your Social Security benefits continue to support you in the years ahead.