4 Reasons You're Missing Out on Social Security

Ninety percent of Americans over age 65 receive Social Security benefits, but many are missing out on maximizing their payments, say the experts.

Social Security currently makes up about 40 percent of all income for older Americans, and a walloping 90 percent for about half of all unmarried people in that demographic, which makes getting the biggest bang for your buck crucial. Here are four reasons why you could be losing money:

It's common knowledge that the longer you wait to start receiving Social Security on your own earnings record, the higher your benefits will be. For every year between age 62 and 70 you delay claiming, your benefits will increase between 6 and 8 percent.

For married couples, coordinating which spouse claims benefits when is absolutely vital says Ted Sarenski, a CPA, financial planner and president and CEO of Blue Ocean Strategic Capital in Syracuse, N.Y.

"You want that higher wage earner to wait as long as possible to collect their own benefit to give the couple...the highest benefit possible," he explains.

Under current law, spouses who are at Full Retirement Age, which is currently 65 to 67 depending on your birth year, may claim a benefit equal to half of their partner's. Those between age 62 and Full Retirement Age will receive a further reduction based on how close they are to that age.

Which is why it often pays to give the breadwinner's benefits the maximum time to grow, while the lower-earning partner cashes in on spousal benefits, echoes David Richmond, president of Richmond Brothers wealth advisory firm in Jackson, Mich.

If, for example, someone is eligible to receive spousal benefits or $1,000 per month in Social Security benefits on their own record starting at age 62, they could take the $1,000 monthly check or wait until age 66, claim a full spousal benefit for four years, then cash in on their own newly inflated benefits package at age 70. In that scenario, "they end up with literally tens of thousands of dollars more," he says.

(MORE: Preparing for Social Security — a 7-Point Checklist)

For emotional purposes, that's probably a good thing. But for Social Security, keeping a former spouse in mind can translate to extra cash, especially if your ex earned significantly more than you during their work tenure.

If you were married at least 10 years, are currently unmarried and are Full Retirement Age, you will be eligible for a benefit that equals one-half of your ex spouse's full retirement benefit. You may start claiming that spousal benefit as early as 62, but you'll receive a reduced amount.

"It's not just one divorced spouse," says Carol Bogosian, Associate with the Society of Actuaries and president of CAB Consulting, a pension and retirement planning consulting firm in Chicago. "If you're married ten years to one person and then ten years to another and somehow ten years to a third, all three of those ex-spouses can claim on your record."

In addition to being married a decade or longer, you must be in a position where the benefit you would receive based on your own work record is less than the ex-spousal benefit you would receive based on theirs.

A double bonus is that you can claim an ex-spouse benefit without too much interaction with your former flame. According to the Social Security Administration, claiming a benefit on your ex's record does not impact the level of benefits they receive.

(MORE: The Social Security 'Split' That Pays for Couples)

You can work and collect Social Security at the same time, but it will cost you, if you're under Full Retirement Age.

Those below retirement age can earn up to $15,480 for 2014 without any Social Security reduction, but "your benefits are reduced by one dollar for every two dollars over that amount that you earn," says Joseph Matthews, author of Social Security, Medicare and Government Pensions: Get the Most Out of Your Retirement and Medical Benefits. "People get hit with a double whammy even if they're working part-time." Those who start taking Social Security after reaching Full Retirement Age keep all of their benefits, regardless of how much they earn.

In addition to a reduction in benefits, earning while claiming can change your tax liability. According to the Social Security Administration, those who file individual tax returns and have "combined incomes" — a/k/a your adjusted gross income plus nontaxable interest income plus half of your Social Security benefits — between $25,000 and $34,000 may have to fork over income tax on up to half of their benefits. Earn above $34,000 and you could pay tax on up to 85 percent of your benefits.

(MORE: Social Security's Real Retirement Age)

If you're eligible to claim benefits on someone you're no longer tied to, it pays to make sure that the Social Security office is aware, says Bogosian.

"Checking early and before you're ready to retire on the data that Social Security has so they can do the right calculation is crucial," she says. "Inform Social Security of a special situation such as I was previously married. I am divorced but I was married over 10 years or I have a spouse that died. It's very important to let them know that information because they don't necessarily have that in their records."

Luckily, it's fairly easy to make sure that Social Security knows about your special circumstances and previous earnings. Check your Social Security benefit, payment information, and earnings record at ssa.gov/myaccount.