Checking your Social Security statement each year is crucial to catching both criminal activity and innocent errors that can undermine your retirement. But to scan your record, you might have to do a little more work than in the past.
To save money, the Social Security Administration has stopped mailing annual Social Security statements to everyone. As of 2017, only people who are over age 60 and are not yet receiving Social Security benefits get a mailed a statement.
However, you can still access your annual report online by creating a “my Social Security” account. You can use the online account to access your records at any time.
Keep reading to find out the reasons why not checking your statement is one mistake you can — and should — easily avoid. Then, make sure you check your Social Security statement each year.
You Might Catch Identity Theft
Most people who imagine identity theft picture some crook using their information to open a credit card or to access their money. However, identity theft also might include a fraudster who uses your Social Security number to get a job.
For example, someone could use your name and Social Security number to apply for a job and pass a background check. Or, a criminal could use your information to get earnings under your name for tax purposes.
Checking your Social Security statement can help you stop this type of identity theft. If you see employers listed on your statement that you don’t recognize, call the Social Security Administration. Not only will this keep your work records accurate, but you’ll also know that someone has your information so that you can be on high alert and ready to report the identity theft.
You Might Spot Earnings-Record Mistakes as They Happen
To be eligible for Social Security retirement benefits, you generally need to have accumulated at least 40 work credits over your lifetime. In 2017, you earn one credit for every $1,300 of wages or self-employment income you earn, up to a maximum of four for the year. If some of your earnings aren’t reported, you might miss out on annual credits.
In addition, the amount of your benefits is based on your earnings. You want to have as many credits and as much earnings racked up as possible to maximize your benefits. It’s much easier to prove a mistake if you catch it when it happens because you likely will still have all of your tax records handy. If you find a mistake, call the Social Security Administration to correct it.
You Can Verify Medicare Eligibility
Your Social Security statement also tracks whether you have earned enough credits to be eligible for Medicare when you reach age 65. And, it reminds you to sign up three months before you reach age 65 so you lock in the lowest Medicare costs for which you’re eligible.
To qualify for Medicare when you reach 65, you generally need to be a U.S. citizen or a permanent legal resident who has lived in the U.S. for at least five years. In addition, you or your spouse needs to have accumulated 40 work credits.
You’ll Maximize Social Security Benefits
A Social Security statement shows your estimated benefits based on average earnings over your career. For future years, the statement assumes you’ll earn about as much as you did in the year or two previous to the most current statement. As you get older, estimates become more predictive because there are fewer future years to predict.
Based on these estimates, your statement allows you to compare what you would receive each month if you were to take benefits at the earliest possible age — currently 62 — as well as if you took them at full retirement age, or delayed them until age 70. This will help you decide when to start receiving benefits.
You Can Plan Retirement Spending
A Social Security statement can show you how much income you’ll have when you stop working. That allows you to create a spending plan for retirement.
Checking your Social Security statement each year allows you to know where you’re at financially so you can make wise financial decisions with your Social Security check. It also helps you spot Social Security mistakes on your statement, so you get them corrected as soon as possible.
You Can Ensure Adequate Disability Protection
Younger people might wonder why it’s important to check a Social Security statement decades before retirement. However, Social Security also provides disability benefits in the event you’re hurt and can’t work.
By checking your statement, you can estimate how much you’ll receive if you are disabled. Use that number to decide if a disability policy your employer offers will provide you with enough protection, or if you need an additional disability insurance policy to protect your income.