If you're like a portion of people here in Florida then you may not have given your retirement age a second thought because you had a pension to fall back on along with other forms of savings. There was also Social Security retirement benefits to look forward to, which made the decision to retire on time or even earlier all that much easier to make.
If you're like most people, you probably also planned well, making sure that you had all of your financial ducks in a row and were able to pay for added expenses such as medical care. Unfortunately, this careful planning could be derailed if you are affected by a mistake made by the Social Security Administration.
As you may have already heard, the mistake we are referring to is an accounting error that both underpaid and overpaid recipients of Social Security retirement benefits and government pensions. The mistake, the Administration explains, could cost the government $2.5 million per year if the matter is not resolved.
The reason this could put a kink in your financial plans is the fact that the government is likely to request repayment of overpaid benefits. As you can imagine, this could be incredibly problematic for the affected retirees who are on a relatively fixed income. Paying for health care could become increasingly difficult, which could force some to rely on Medicaid more to offset the cost.
Though this accounting error may only affect a small portion of the population, the difficulties they could face because of it could be tremendous. And while it might not lead to any litigation, it should illustrate to our readers the issues one could face when their carefully laid retirement plans come across a bump in the road.
Source: Investment News, "Social Security's $12.4 million error," Mary Beth Franklin, May 19, 2015