5. What If I Have Unpaid Debts?
Private creditors can't touch Social Security, but federal agencies can garnish the benefits. Child support, alimony, back taxes and home and student loan defaults can reduce your benefits.
Recently, unpaid student loans have had more of an impact. Between 2001-15, the government collected about $1.1 billion from Social Security recipients of all ages for unpaid student loans, according to a GAO study . While updated stats have not yet been published, that total is undoubtedly higher six years later.
If you have debt, it may be wise to pay off as much as you can before retirement to help preserve your benefits.
Know Your Options Before Retirement
Social Security may be a large part of your overall retirement investing plan, so it's important to understand all your filing options before it's time to claim your benefits. You can contact the Social Security Administration up to four months before starting benefits, but you can review your options much earlier.
Socialsecurity.gov is a good resource, or you can call for an appointment at 1-800-772-1213. You can also find other articles about Social Security at americancentury.com.