Your Social Security benefits are based on the average wages you earned during the 35 years of your career when your income was highest (after each year’s wages are adjusted for inflation).
Since your benefit is equal to a percentage of your average wage, it is critical that this wage is calculated correctly. And that’s why everyone should check their Social Security income every year.
What’s Your Social Security Income Record?
The Social Insurance Service receives an annual statement of your earned wages. The SSA collects all of this data in your earnings statement. The record shows:
- The year you worked
- The amount of your income on which you have paid Social Security tax
- The amount of your income on which you paid Medicare tax:
The amount you paid Social Security taxes on should usually match the total amount you earned over the course of the year. But that’s not always the case if you’ve made a lot of money. There is a “wage base” cap, and income earned above it each year is not taxed for Social Security purposes and does not appear on your income record. In 2022, the wage base cap is $147,000, so if you earn more, only $147,000 will appear on your earnings record.
In contrast, Medicare taxed income shows the full amount you earned during the year, because you pay Medicare taxes on all the money you earn with no wage base cap.
How Can You Check Your Social Security Income?
Checking the register of your earnings on file with the Social Security Administration is actually very simple.
You can do this online by creating an account at mySocialSecurity.gov. Creating an account is free, although you must be at least 18; have a valid Social Security number and US mailing address; and provide an email address. You will also need to answer some questions about identity verification so that you can prove that you are really who you claim to be.
If you already have an account, you can log in with the username and password you created when you opened it. A security code will be sent to the email address you have on file, which you will need to enter. And you must agree to the terms of service, including not sharing your account access information with others.
Once you have signed up, the main page of the website will show the option ‘View your full earnings statement now’. When you click on it, you’ll see a list of details about each year you’ve worked and the amount you’ve earned.
Why is it important to check it every year?
Checking your Social Security income annually is critical. That’s because if your pay is underreported, you won’t get credit for the full amount you earned and paid taxes on. This error will lower the average career wage that the Social Security Administration uses when calculating retirement benefits.
If you wait too long to check your account, you may not remember what you earned, making it harder to spot errors. And if you to do find an error, you may no longer have the documentation needed to prove it and correct the record.
You can’t afford to lose credit for income on which you paid Social Security taxes and get a smaller benefit as a result. It only takes minutes to log into your account every year and check your earnings history, so put this task on your calendar as an annual must-do.