Social Security Online Statements Can Help You Increase Your Benefits
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The Social Security Administration recommends recipients visit its website as a first stop for service as the agency works to reopen its field offices.
But many people are hesitant to apply for benefits online. Only about half of retirees have used this method since 2013, according to Boston College’s Center for Retirement Research.
That’s even when the Social Security Administration has stepped up its tools for online applications, and it’s expected to continue to do so following a recent executive order signed by President Joe Biden.
There’s also another valuable resource — the newly redesigned online benefit statements — which may contain key information for increasing your Social Security retirement benefits.
Statements are available online by creating a My Social Security account. People aged 60 and over who are not currently receiving benefits and who have not opened an account online should receive their statements in the mail three months before their birthday.
With the redesigned layout, the Social Security Administration aims to make it easier for workers to find information at a glance and simplify its complex programs. These declarations are also now accompanied by information sheets adapted to specific age groups.
The agency recommends that workers of all ages verify the accuracy of their declarations every year. This goes for workers of all ages who contribute to the program – from 18 to 70 and over.
These records also contain clues on how to get the most out of your benefits, experts say. Additionally, there is additional information not included in these statements that you should research.
Retirement benefit estimates
The revamped statements now feature a blue bar graph including benefit estimates when a person makes a claim at nine different sampling ages.
If you apply at age 62, when you first become eligible, you get permanently reduced benefits.
The amount of your benefit checks will increase for each year of waiting until age 70. If you apply at full retirement age — usually 66 or 67, depending on your year of birth — you’ll receive 100% of the benefits you’ve earned. Wait past that age and your benefits will increase even more. It stops at age 70, as there is no increase to delay benefits beyond that point.
The table included in the statement shows your expected monthly retirement benefits from age 62 to 70.
“The blue bar form is a welcome addition for workers who need information to help them make good choices about their benefits,” said David Freitag, financial planning consultant and social security expert at MassMutual.
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The new returns also include a table of a worker’s income history, with income taxed for Social Security and Medicare broken down separately.
However, the new statement only includes 20 years of earnings, whereas the previous statement format included all years in a worker’s earnings record.
A complete income history is available on workers’ personal My Social Security accounts. Experts say looking at just 20 years is limited and it’s important to take the extra step to see your full income history.
Social Security calculates your average monthly earnings based on your 35 highest earning years.
But mistakes can happen. The Social Security Administration and other experts advise workers to check their income history to make sure they show the exact amount earned each year and that none of your income has been omitted.
“It’s a valuable exercise for people to do to make sure they don’t have erroneous income,” said Joe Elsasser, founder and president of Covisum, a Social Security claims software company.
“Sometimes people get a zero, and they shouldn’t have,” he said.
Seeing your full earnings history can also help you know how much of your benefits may be adjusted if you worked in jobs for which you earned a pension and did not pay Social Security taxes. These offsets are known as the Windfall Elimination Provision or Government Pension Offset and affect both your eligibility for benefits and that of your family.
“The only solid way to test WEP/GPO offsets is to see the full profit history,” Freitag said.
Disability and survivor benefits
In addition to eligibility for retirement benefits, the statement also provides estimates of what your monthly income would be if you claimed disability benefits.
There are also estimates of monthly income through survivor benefits that your eligible spouse or minor children could receive if you die.
The benefit statement will also tell you if you have accumulated enough credits to qualify for Medicare at age 65.
While it’s not mandatory to enroll in Medicare Part B when you reach that birthday, failure to do so may result in delays or higher monthly premiums in certain circumstances, the Social Security Administration notes.