Your Social Security Statement contains information about whether or not you have worked long enough to receive Social Security benefits as well as how much you will receive. Reviewing the Statement is the first step on the road to understanding how Social Security works and making sure that Social Security has a correct history of earnings to use to compute your future benefit.
When you work and pay Social Security taxes, you earn up to a maximum of four “credits” for each year. In 2017, you must earn $1300.00 in covered earnings to get one Social Security credit and $5200.00 to get the maximum four credits for the year. (You do not earn credits for pension payments or for interest or dividends on savings and investments.)
Your average earnings over your working years determines how much your monthly payments will be. Social Security averages together your highest thirty-five years of earnings. When you need to find out how many work credits and an estimate of your retirement benefit, you can consult the Social Security Statement. Estimates for disability and survivor benefits are also available.
Your Social Security statement is now available online by setting up a my Social Security account (www.socialsecurity.gov/myaccount/). Creating your own account allows you to access to your Social Security statement information 24/7. You’ll answer a few questions that we expect only you to know the answers to set up your account and safeguard your information. We use multifactor authentication (sending an entry code to your cellphone or email to access the account) as a best practice to keep your personal information safe.
Social Security has resumed mailings of the paper statement to workers reaching 60 who aren’t receiving Social Security benefits and not registered for a my Social Security account. They will receive a statement in the mail about 3 months before their birthday.
Reviewing Your Record
Reviewing your statement starts by looking at these items on your statement:
• Work Credits
If you have already earned the 40 work credits required for most benefits, your record will show estimates for retirement, disability and survivors benefits. If you don’t yet have 40 work credits, the statement shows how many you have and how many you still need to qualify for benefits. You can find additional information about work credits at http://www.socialsecurity.gov/planners/credits.htmlReviewi.
• Your Earnings Record
Review your history of earnings year by year to make sure each year is correct. This is important because Social Security benefits are based on average earnings over your lifetime. If the information is incorrect or there are missing years of earnings, you may not receive all the benefits you are entitled to in the future.
If you need to correct your earnings, contact Social Security at 1-800-772-1213 (TTY 1-800-325-0778) between 7 a.m. and 7 p.m. Monday through Friday. Please have your W-2 or paystubs when you call.
• Benefit Estimates
Next review the estimated benefits section. Be sure to review not only your retirement estimate, but your disability estimate and the survivors estimate for your family as well. Disability is something most people avoid considering. Studies show that a 20-year-old worker has a 1-in-4 chance of becoming disabled before reaching full retirement age underscoring the importance of disability benefits. Since the value of the survivors insurance you have under Social Security is probably more than the value of your individual life insurance, you’ll want to check the accuracy of your earnings as part of planning for survivors benefits.
You can visit the website to use a calculator called The Estimator (www.ssa.gov/estimator.html) which can compute future Social Security retirement benefits by changing variables such as retirement dates and future earnings. The statement gives you estimates at 62, your full retirement age (http://www.ssa.gov/planners/retire/agereduction.html ), and 70. What if you want to know what your benefit would be at age 63 or 64? What if you want to project what future earnings might add to your benefit? The Estimator can help you answer these “What If” questions for yourself.
• Schedule Your Yearly Check-Up
Once you’ve completed your review of your statement, each year make an appointment with yourself to review the most recently posted year of earnings on your Social Security record. By checking your record yearly, you can be certain when you retire that Social Security will have a correct record of earnings to use when computing your retirement benefit. This review will also assure a correct record for disability benefits or survivors benefits. If you
sign up for a my Social Security account, we’ll even send you a reminder to review your information several months before your birthday.
Only you can determine if your earnings record is correct. Having a correct record is the
basis for a correct computation of your benefit amount. Make today the day to set up your account and review your earnings record.