Unlock Your Social Security Benefits: Why You Must Read Your Latest Statement First!

Understanding Social Security is crucial for American workers. For instance, it’s important to know that the Social Security Administration evaluates your 35 highest earning years, adjusted for inflation, when calculating your benefits. Additionally, married couples should have a clear understanding of how spousal benefits are structured.

One vital action to take before you start receiving Social Security benefits is to thoroughly review your most recent Social Security statement.

Every American worker receives an annual Social Security statement from the Social Security Administration, which is readily accessible. You can check your latest statement online at the SSA’s website (www.ssa.gov) by setting up an account if you haven’t already done so.

What Does Your Social Security Statement Include?

The key detail in your Social Security statement is an estimate of your Social Security benefits based on your personal earnings history. But the statement offers much more information than just this. Here’s a breakdown of what’s included:

• A detailed year-by-year breakdown of your earnings that were subject to Social Security tax, up to the maximum taxable amount each year. For example, my record begins with the $4,000 I earned at Burger King when I was 15.
• The total amount of Social Security and Medicare taxes paid by you and on your behalf by employers throughout your career.
• A confirmation of whether you have earned enough credits to qualify for benefits, which typically requires at least 10 years of work.
• Eligibility for disability benefits should you become disabled.
• The potential benefits your family could receive in the event of your untimely death this year.
• Information on your eligibility for Medicare benefits starting at age 65.
• Projected estimates of your Social Security retirement benefits from ages 62 to 70.
• Identification of your full retirement age.
• A list of essential Social Security information and links to more details on common questions.

How to Effectively Use Your Social Security Statement

When reviewing your Social Security statement, there are several critical aspects to focus on, particularly if you’re considering claiming Social Security benefits soon.

First, verify the accuracy of your earnings record. It’s not uncommon for some earnings to be missing. If you notice any discrepancies, there’s a contact number provided for reporting errors. Even a single missing year of earnings can significantly impact your Social Security benefits.

Also, it’s beneficial to understand how the age at which you start receiving benefits affects the amount. Your benefit amount decreases if you claim before reaching full retirement age and increases if you delay. For example, if your full retirement age is 67 (as it is for anyone born in 1960 or later), delaying benefits until age 69 could increase your monthly Social Security payment by 16%. While this might be moot if you’ve already decided to retire and claim benefits, this information can be crucial in shaping your decision if you’re still exploring your options.

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