Millions of Americans who depend on Social Security benefits are facing critical year-end deadlines that could affect their payments in the coming year.
Experts warn that failing to act before December 31 may cause individuals to Risk Losing Social Security Money in 2026 due to incorrect earnings records, Medicare-related surcharges, benefit miscalculations, or administrative errors that take months to resolve.
Federal officials, economists, legal analysts, and retirement planners all emphasize completing several essential tasks before year’s end to protect one’s income and long-term financial stability.
Do These 5 Things Before December 31
| Key Deadline | Why It Matters |
|---|---|
| Dec. 31 earnings corrections | Ensures accurate 2026 benefit calculation |
| Medicare income reporting | Determines 2026 IRMAA surcharges |
| Direct deposit update | Prevents delayed or returned payments |
| SSI early COLA | Applies Dec. 31 due to holiday schedule |
| Annual retirement tax review | Reduces tax burdens that lower net benefits |
Why These Year-End Deadlines Matter for Millions Who Could Risk Losing Social Security Money
The December 31 cutoff is tied to federal administrative cycles, tax-year policies, and Medicare income assessments. Together, these factors influence how much beneficiaries will receive in 2026. Missing a single update can create avoidable financial consequences for retirees, disabled individuals, or survivors receiving benefits.
Former SSA Deputy Commissioner Nancy Altman explained in a 2024 policy forum that “Social Security is a precise formula-driven system. If earnings or personal information is incorrect at year-end, the error can cascade into benefit reductions or delays that affect recipients for months.”
Economists say these deadlines matter even more today because benefit adequacy is increasingly strained by rising living costs and healthcare expenses, placing additional pressure on household budgets.
Step 1 — Review and Correct Your Earnings Record Before the Deadline
One of the most significant factors that determines monthly benefits is lifetime earnings. Any missing income years or incorrect wage amounts can lead to underpayments. The SSA states that wage-reporting errors are common and must be corrected promptly.
How the Benefit Formula Makes Errors Costly
Social Security calculates retirement benefits using:
- The highest 35 years of indexed earnings
- A progressive formula that favors lower-income workers but still heavily relies on wage accuracy
- Adjustments based on claiming age
If an entire year of wages is missing or underreported, the formula substitutes a zero for that year, which may cause a noticeable drop in lifetime benefits.
Common Causes of Record Errors
According to SSA audits and inspector general reports, errors may occur when:
- Employers incorrectly report wages
- Self-employed workers misreport income
- Name changes (marriage or divorce) are not updated
- Earnings from multiple employers create reconciliation delays
Correcting these mistakes after the year closes is more difficult, and some errors can take six to twelve months to resolve.
Step 2 — Examine the 2026 COLA Notice to Confirm Your Updated Benefits
The SSA announced a 2.8% Cost-of-Living Adjustment (COLA) for 2026, based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The COLA ensures benefits maintain purchasing power amid inflation.
Why Reviewing the COLA Notice Is Essential
Most errors in COLA application arise from:
- Incorrect benefit category (spousal, disability, survivor)
- Misreported marital status
- Missing dependent information
- Misapplied Medicare premium deductions
Ignoring the notice could cause beneficiaries to Risk Losing Social Security Money if the wrong benefit amount is applied.
Early Payment for SSI
Supplemental Security Income (SSI) recipients receive the 2026 COLA early — on December 31, 2025 — due to the New Year’s Day federal holiday. Advocates encourage recipients to check their bank accounts after the holiday period to ensure deposits arrive correctly.
Step 3 — Manage 2025 Income to Avoid Higher Medicare Premiums
Medicare premiums can sharply reduce net Social Security income when reported income exceeds federal thresholds. This is known as the Income-Related Monthly Adjustment Amount (IRMAA).
Why IRMAA Matters
The Social Security Administration automatically deducts Medicare premiums from monthly benefits. Higher IRMAA brackets can reduce net payments by hundreds or even thousands of dollars annually.
Strategies Beneficiaries Use to Lower Income Before Dec. 31
Financial planners recommend:
- Reducing taxable withdrawals from retirement accounts
- Using Qualified Charitable Distributions (QCDs) to satisfy RMDs without increasing taxable income
- Delaying capital gains into the next tax year
- Timing Roth conversions to avoid unexpected surcharges
Economic analyst Dr. Emily Hart told reporters, “Many retirees unknowingly move into higher IRMAA brackets because they overlook the income thresholds. A single large withdrawal can significantly alter their Medicare premiums for the entire next year.”
Step 4 — Update Direct Deposit, Banking Info, or Address to Prevent Payment Delays
The SSA processes more than 70 million payments monthly. Errors in direct deposit information can cause significant delays, particularly during federal holidays.
Why Banking Information Must Be Updated Early
Payment disruptions occur when:
- Accounts are closed or numbers change
- Bank mergers alter routing identifiers
- Beneficiaries relocate without updating mailing addresses
- Returned payments trigger fraud detection protocols
SSA warns that processing changes can take several business days. Waiting until late December increases the likelihood of experiencing a disruption that may inadvertently cause someone to Risk Losing Social Security Money.
Step 5 — Complete Year-End Tax and Retirement Planning to Protect Long-Term Benefits
A holistic year-end review safeguards retirement finances beyond Social Security alone.
Meeting Required Minimum Distributions (RMDs)
Failing to take required withdrawals from retirement accounts carries IRS penalties up to 25% of the amount not withdrawn — greatly reducing available retirement income.
Evaluating Spousal, Divorce, and Survivor Benefits
Changes in marital status, death of a spouse, or eligibility for higher survivor benefits may require advance notification.
A legal expert at the University of California, Professor Jenna Robinson, noted that “survivor benefits are one of the most misunderstood aspects of Social Security. Not updating status promptly can cause beneficiaries to miss out on payments they are legally entitled to.”
Considering Roth Conversions
Partial conversions of traditional retirement assets may reduce future taxable income and IRMAA risk.
Checking Beneficiary Designations
Though Social Security does not allow beneficiaries for payments, associated retirement accounts do. Misaligned designations can complicate estate planning.
Additional Area to Review — Social Security Overpayments and How to Avoid Them
One less-known reason Americans may Risk Losing Social Security Money is through the SSA recouping overpayments. These occur when beneficiaries receive funds they were not eligible for, often due to:
- Outdated income reporting
- Unreported changes in household or marital status
- Disability eligibility shifts
- SSI resource miscalculations
The SSA is legally required to recover excess funds, sometimes by withholding future payments until the balance is settled.
Former SSA Inspector General David Lamont said, “Overpayments are often unintentional, but the consequences are real. Beneficiaries can face aggressive repayment demands if they do not update their information before the deadline.”
Protecting Against Fraud and Cybersecurity Risks
Year-end periods see spikes in phishing activity as scammers target Social Security recipients.
Signs of Fraud
Officials warn of:
- Fake SSA phone calls demanding payment
- Emails mimicking official letters
- Websites requesting Social Security numbers or banking details
The real SSA will never threaten arrest, demand gift cards, or ask for immediate wire transfers.
Securing Your “my Social Security” Account
Beneficiaries should:
- Enable two-factor authentication
- Use strong, unique passwords
- Monitor account activity frequently
Cybersecurity experts note that stolen Social Security credentials are often used to redirect direct deposit payments — a major reason people Risk Losing Social Security Money without realizing it.
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Congressional and Policy Context Affecting 2026 Payments
Lawmakers continue debating the long-term solvency of the Social Security Trust Fund. While no immediate reductions are expected in 2026, policy discussions include:
- Adjusting payroll tax caps
- Modifying COLA calculations
- Changing full retirement age
- Revising Medicare premium formulas
Analysts suggest beneficiaries should stay informed, as legislative decisions may shape future benefit structures.
FAQs About Do These 5 Things Before December 31
Can I fix an earnings error after December 31?
Yes, but corrections may not be reflected in time for the 2026 calculation cycle.
Why do Medicare premiums affect Social Security?
Premiums are automatically deducted, so higher surcharges reduce net benefit amounts.
Are COLA increases guaranteed every year?
No. COLA depends on annual inflation indexes.
Can I visit an SSA office instead of using the online portal?
Yes, but appointments may be delayed due to staffing constraints.
What if my payment does not arrive?
SSA advises waiting three business days before contacting them for a payment trace.
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