The Social Security Administration is finalizing plans to resume mailing paper Social Security statements to some workers in September 2014. Statements will be sent to workers every five years in the year they attain ages 25, 30, 35, 40, 45, 50, 55 and 60, if they are not registered to receive online statements or already receiving benefits.
The SSA previously mailed paper statements to all workers ages 25 and older every year between 1999 and 2011, and to those ages 60 and older between 1995 and 1999 and after 2012. The SSA sent out 152 million Social Security statements to workers in fiscal year 2010. However, these mailings were suspended in April 2011 to save money.
The 4-page statements list the worker’s entire earnings record and the amount paid into Social Security and Medicare so that it can be reviewed for accuracy and planning purposes. “It gives you a way to make sure Social Security has an accurate version of your earnings record,” says Jonathan Peterson, executive communications director at AARP and author of “Social Security for Dummies.” “If you spot something wrong, let them know right away.”
An accurate earnings record is important because the 35 years in which you earn the most will be used to calculate your Social Security payments. If you don’t work for 35 years, zeros will be factored in for those years. “Knowing your highest 35 years, or lack of 35 years, may encourage you to continue working to increase your retirement benefit,” says Brian Vosberg, a certified financial planner and author of “The Complete Retiree's Guide to Social Security”.
The statements provide workers with an estimate of the retirement benefit they will receive at ages 62, 70, and full retirement age, which is typically 66 or 67 depending on your birth year. “To get estimates for other retirement scenarios, try SSA’s online estimator at www.ssa.gov/estimator,” says Andy Landis, author of “Social Security: The Inside Story.” “‘Add a new estimate’ to customize your retirement date and future earnings amounts.” Monthly payouts are lowest for those who sign up for benefits at age 62, but increase each month you delay claiming up until age 70. After age 70 there is no additional benefit to delaying your payments.
The mailing also lists the amount you would get if you become disabled and how much your children and spouse could receive if you pass away. These benefit estimates assume that you will continue to earn your current salary and are more accurate for people who are closer to retirement. Your actual benefit could be different if your earnings or the Social Security law used to make the calculations change. The statements don’t include estimates for people who have not yet worked long enough to qualify for benefits and explain the necessary earnings to eventually receive payments. “Make sure you have enough credit to qualify,” Vosberg says. “If you have been out of the workforce for several years, you might not be eligible for these benefits.”
However, you no longer need to wait for your paper statement in the mail to get a personalized estimate of your Social Security payments or review what you have paid in. The Social Security Administration has offered workers age 18 and older the opportunity to view their statements online since May 2012. To download your statement you need to create an online account at www.socialsecurity.gov/myaccount, which involves answering some personal questions to verify your identity. The multiple-choice questions might ask for information about previous addresses or financial products you own, and are checked with data from the credit reporting agency Experian. Once your identity is verified you can create a user name and password and view your statement online. The SSA recommends checking your online statement once a year.