This is great advice.
One minor oversight can cost you hundreds, or more
Social Security statements list important information, including birth dates and earnings history, and any inaccuracy could result in a reduction of benefits. Only Americans 60 and older, with no online account with the Social Security Administration, receive Social Security statements, but everyone else can sign up for an account on My SSA.
How much retirees receive in Social Security depends on numerous factors, including how old they are when they begin claiming benefits — and how early or delayed it is in relation to their Full Retirement Age (or FRA). The FRA for people born in 1960 and after is 67 years old, whereas those born before that may have a FRA of 65 or 66 and a few months.
Retirees can begin claiming at 62, but will get a fraction of the benefit they’d receive if they were to delay their benefits, when they’d get more than what they’re owed. For example, if a person’s full retirement age is 67, she would get 70% of her monthly benefit, but if she delayed her check until she turned 70, she would get 124% of her benefit, according to the Social Security Administration. Once a claiming decision has been made it cannot be changed.
The introduction page will have your name and mailing address, as well as your estimated payment at full retirement age — just in case you just want to quickly check how much you should expect to receive at full retirement age.
And although that number is helpful for planning your retirement finances, you should look further to ensure it is accurate, advisers say. Linda Erickson, a financial adviser and founding partner at Erickson Advisors in Greensboro, N.C., advisers her clients to check their statements once every one or two years for inaccuracies.
The second page includes all the numbers you may need for financial planning, including what you would receive in benefits if you began claiming at full retirement age, age 70 or age 62. It will provide your specific FRA, which may be 66 and a few months. Any claiming done before or after will adjust the anticipated benefit slightly.
The statement also includes what benefits you would receive if you became disabled, or what your survivors (a spouse, child, or in some cases a dependent parent) would receive in the case of death. The document also states if the account holder has enough credits to qualify for Medicare.
The last item to check before moving on to the next page is your date of birth — this date determines your full retirement age, and your estimated benefit will be incorrect if this information is wrong.
This page is also critical to determining if the estimated benefit is correct, and lists your wage history. Although it can be tedious, it’s important to comb through these figures to verify your earnings history is correct.
Social Security is based on lifetime earnings. The administration indexes actual earnings, then calculates that average indexed monthly earnings for the 35 top-earning years. The numbers are punched into a formula, which results in the basic benefit one would receive at full retirement age.
Checking this history as soon as possible will help avoid any headaches, said Mark Smith, president of Vision Wealth Planning in Glen Allen, Va. “Someone who is 50 or in their 50s has potentially 30 years of earnings listed, and won’t be able to verify some of that because it’s too far back,” he said. “It is important to do it early and every year.”
If there is an error
Sometimes errors occur, either by missing earnings years or a miscalculation. If an error occurred on your statement, contact the Social Security Administration, which has an automated phone service available 24 hours a day, 7 days a week at 1-800-772-1213. Calls are answered between 7 a.m. and 7 p.m. Monday through Friday, though wait times may be long.
Those with incorrect or missing earnings history should collect proof of those wages in the form of a W-2, tax return, wage stub or other relative documents. In a worst-case scenario where that information isn’t readily available, gather information including the name of the employer, the dates of employment and how much was earned, the SSA said.
by Paul B. Burkhalter Managing Partner of Morgan & Weisbrod, Board Certified in Social Security Disability Law.