Understanding Your Social Security Statement
You may have an idea of what Social Security is, but do you know how it will impact you? Many Americans know of the system but aren’t entirely sure how it works. Let’s clear that up. Social Security is a government system that assists American workers with income either after they retire or if they become disabled. Established in 1935 by President Franklin D. Roosevelt, the system was designed to help provide assistance for aging American workers.
The Social Security Administration, or SSA, will pay qualifying recipients in monthly installments based on their work record and the age they begin filing. A work record is an official document of a person’s employment status throughout their lives. Based on the amount of time someone works, they accumulate work credits that become used to determine the value of their Social Security benefit. The other factor determining the amount a person could receive in benefits is the age they begin filing.
But is there a way to help you determine the amount you should expect to receive from Social Security?
Yes, and it is through your annual Social Security Statement.
How do you pull your statement?
A Social Security statement used to be mailed each year, but growing costs have deterred the SSA from mailing annual statements. The best way for you to access your Social Security information is through the SSA website. Here, you will create your own account and will be able to access your personal information. The SSA makes it simple and straightforward to create your account and store your personal Social Security information.
I advise you to take a look at your statement at least once per year to ensure that everything looks right. Errors do happen, and being able to identify them earlier rather than later will save you a lot of time and heartache.
By setting up your own online account you will also be able to do the following:
Request a new Social Security card
Organize retirement papers
Fill out disability forms
Use retirement calculators to help determine the exact amount you should receive in benefits.
Your Social Security statement can be really helpful in retirement planning, and accessing it is easy and simple. So don’t wait to check out your benefits!
Why should you pull your statement?
Just because you have access to your Social Security statement online, why should you check it? There are a number of reasons. Firstly, checking your statement will help you understand the benefit you will receive which will be invaluable in retirement planning. Knowing how much money you will be able to claim from Social Security will help you plan your income and cash flow in retirement. Since your benefit will change if you start claiming at 62 or if you wait for 70, it will be important to understand those numbers and how they will affect you in the future.
Your statement will also alert you to any errors or mistakes in your work record or disability claims. It is important to stay on top of your documents so that any issues can be resolved quickly.
Beyond retirement planning, your Social Security statement will also be able to tell you the amount you would receive should you become disabled and what your family will receive if you pass away. Your Social Security statement, therefore, becomes an essential part of estate planning as well as retirement planning.
How will Social Security impact you?
There has been a lot of talk over the years of the decline of Social Security. Financial analysts even predict the fund to be depleted by 2034. Does this mean that workers today won’t be able to receive any benefits? Not necessarily.
Today’s workers may still have access to about 70% of their benefit when they retire, but Social Security is a dwindling system. With more people taking money out than putting money in, the system cannot thrive. This fact does call into question the longevity of the program itself which makes it even more important for you to know how it will impact you. Today’s workers will not have access to the same benefit as their predecessors and understanding that will help in retirement planning and accumulating more assets to depend on when retirement comes.
Your Social Security statement has a lot of valuable information. By taking a look at what you can expect, you will be able to more accurately plan for your retirement and beyond.