Exploring Heather Schreiber’s 5 costly Social Security traps and exploring options of how to handle them.

I’ve seen it time and again throughout my career: the intricacies of navigating Social Security can trip up just about anyone. So when I saw the headline “5 Sneaky Social Security Traps” in Heather Schreiber’s newsletter, I knew right away this was going to be something that deserved a closer look on the podcast.

Let’s dive into these 5 Social Security traps–and these aren’t just random quirks—that can lead to unexpected gaps in income, tax surprises, or permanent reductions in your benefits.

1. The Entire Month Rule

You might think that turning 62 means you’re automatically eligible for Social Security that month. Not quite.

Social Security has a quirky rule: you have to be 62 for the entire month to receive benefits for that month. If your birthday is on June 15, you don’t qualify for June’s benefit. Instead, your eligibility starts in July, and your first payment doesn’t arrive until August.

What’s even weirder is that the SSA counts your birthday as the day before you were born. So if you’re born on June 2, you’re considered 62 starting June 1 and therefore eligible for June benefits (which are paid in July).

If you’re planning on your Social Security check arriving the month you turn 62, you could be left waiting an extra month or two—potentially throwing off your cash flow.

2. Rest in Peace, Now Return to Sender

Just like you must be alive the entire month to earn that month’s benefit, if someone passes away mid-month, they don’t qualify for that month’s Social Security payment—even if it’s already been deposited.

This can be a shock to surviving spouses or family members when the SSA takes that money back. If a loved one passes away on June 14, and the June payment was already deposited in early July, that money must be returned. It wasn’t “earned” under SSA rules.

So whether you’re filing for your own benefit or helping a family member, remember: Social Security is earned month-by-month—and only if you’re alive for the full month.

3. Lump Sum FOMO: When Free Money Isn’t Always Free

When you file for Social Security after your full retirement age, you have the option to take up to six months’ worth of benefits retroactively. That sounds great—who doesn’t like a lump sum?

But here’s the catch: taking that lump sum means your official filing date is backdated. So if you file at age 68.5 and take six months retroactive payments, SSA treats you as if you filed at 68—reducing your benefit by 4%.

That “free” $18,000–$20,000 could cost you thousands more over the course of your retirement. Sometimes it’s worth it, but many people take the lump sum without realizing the long-term cost.

4. Under-Withholding Today May Lead to Regret Tomorrow

Here’s a situation I see far too often: retirees who start taking Social Security, forget to set up federal tax withholding, and then get a surprise bill come tax season.

Unlike pensions or employer paychecks, Social Security doesn’t automatically withhold taxes unless you fill out a separate form (Form W-4V). If you don’t do this and your Social Security income is taxable, you could owe hundreds—or thousands—at tax time.

Take the time to set up appropriate withholding levels. SSA allows you to choose from 7%, 10%, 12%, or 22%.

5. Medicare IRMAA and the Two-Year Lookback

When you hit age 65 and enroll in Medicare, your premiums for Part B (and possibly Part D) can go up significantly if your income from two years ago was high.

This IRMAA (Income-Related Monthly Adjustment Amount) surcharge can sneak up on you—especially if you had a one-time event like a Roth conversion, large capital gain, or business sale.

If you had a significant drop in income due to retirement, job loss, or other life event, you can appeal your IRMAA using a life-changing event form (SSA-44). I’ve helped dozens of clients successfully reduce their IRMAA—and save hundreds each month on premiums.

Plan Smart, Prepare for Surprises

Social Security can be a crucial part of your retirement income. It’s not just about “when” you file—it’s about “how” you plan around it. Whether it’s making sure you’re eligible for your first check, avoiding tax pitfalls, or preparing for Medicare surprises, proactive planning may give you more options to address situations as they arise.

Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!

Subscribe to Retirement Revealed to get new episodes every Wednesday.

Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337

Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify

Additional Links:

Heather Schreiber, HLS Retirement Consulting
Extra Medicare Cost IRMAA Appeal form SSA-44
Social Security Withholding form W-4V
Supercharge your Social Security Benefit with These 5 Tips – Mr. Retirement YouTube Channel
How Social Security Affects Your Retirement Taxes – Mr. Retirement YouTube Channel
When is the Right Time to File for Social Security? – Mr. Retirement YouTube Channel
How to Use the Social Security Quick Calculator (and Why It Matters If You Retire Early!) – Mr. Retirement YouTube Channel
Social Security Earnings Limit 2025 – Mr. Retirement YouTube Channel
Average vs. Maximum Social Security – Where Do You Stand? – Mr. Retirement YouTube Channel
Social Security and Work: How Much Can You Make in 2025? – Mr. Retirement YouTube Channel
WHEN Will You Get Your Social Security Benefits Each Month? – Mr. Retirement YouTube Channel

Connect With Jeremy Keil:

===

Disclosures

Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.

All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.

This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.

The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past Performance is no guarantee of future results.

Legal & Tax Disclosure

Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.

Advisor Disclosures

Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services are delivered through the Alongside, LLC platform. Keil Financial Partners is independent, not owned or operated by Alongside, LLC.

Additional information about Alongside, LLC – including its services, fees and any material conflicts of interest – can be found at

5 Social Security Traps That Could Cost You

Powered by Wave AI