Why You Should Get a Social Security Benefit Statement
By K. Bridget Schneider, CFP®, CRPC®
When was the last time you got a copy of your Social Security benefit statement? If you are like many people, you may think you got one in the mail a year or so ago. However, it may have been several years ago. While the Social Security Administration used to mail statements annually, budget cuts over the last 10 years caused that to stop. Now paper statements are only mailed to those who are 60 or older and haven’t signed up for an online account.
So, you might be wondering, “What’s the big deal? Why do I need a Social Security benefit statement?” Well, this statement contains a lot of important information that you need in the financial planning process. And it’s easy to get one! Let’s look at the valuable information found in a benefit statement, and then I’ll tell you how to get yours.
Estimated Retirement Benefits
The Social Security benefit statement shows estimated retirement benefits based on your current earnings record at various ages – age 62, your full retirement age, and age 70. You may be surprised by the change in value of your estimated benefit at these ages. These amounts are projections based on your current earnings continuing until that age. Since Social Security benefits are not meant to be your sole source of retirement income, you can use this information to evaluate how much you may need in retirement savings to supplement Social Security or whether you should plan to work longer.
Most people only think about the retirement benefit associated with Social Security. But Social Security pays other benefits as well. Your benefit statement will show a disability benefit you may receive if you become disabled and are unable to work. Since a financial plan should consider a wide variety of life events, this is valuable information to help plan for the unexpected in your future.
Another often overlooked benefit of Social Security is the Survivor Benefit. A survivor benefit is paid to your eligible dependents and survivors when you die and aren’t there to provide for them yourself. The Social Security benefit statement shows these projected survivor benefit amounts. And this can be very useful in evaluating life insurance needs.
The benefit statement also shows if you have earned enough credits to qualify for Medicare at age 65. This healthcare benefit gives many the confidence to decide to retire. It’s no secret that healthcare costs are rising. And while some people plan to retire before age 65 and have saved enough to pay for health insurance coverage out of their pocket, many decide to wait to retire until they are eligible for Medicare.
Your Earnings Record
Did you know your Social Security benefit statement will show your earnings record for each year since you started working? Since your Social Security benefit will be based on your highest 35 years of earnings, you should carefully review that earnings history. If you feel there is an error or something is missing, get it corrected as soon as possible by providing evidence such as W-2s or pay stubs. This is a much easier task if you are checking your statement regularly and you will know you have accurate information as you dream of possibilities for your future.
Establish a my Social Security Account
Now you know the importance of obtaining your Social Security benefit statement. It provides you and your financial planner with valuable information to explore how the benefits align with your retirement income needs. The Social Security Administration has made it simple to review statements with an online account. Just go to ssa.gov/myaccount to create a my Social Security account, after which you can review and event print your statement.
Be aware that the Social Security Administration takes account security seriously and has made it clear that an account can only be created by an individual using their own information. You cannot give someone permission – even written permission – to establish an account for you. You can, however, get help from someone such as a financial advisor and there are guidelines for advisors who are assisting clients.
If you need help setting up the my Social Security account or obtaining a copy of your benefit statement, call us at 217-605-8130. We would be happy to help you. At Connections Financial Advisors, our mission is to help you make more informed decisions to better your financial position and reduce your financial stress.
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