How Social Security Statements Can Help You Increase Your Retirement Benefits – Community News
Social Security

How Social Security Statements Can Help You Increase Your Retirement Benefits

An office of the Social Security Administration in San Francisco.

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If you plan well, you may be able to increase your Social Security retirement benefits.

And newly designed Social Security Administration benefit statements can help you with that.

That applies to employees of all ages who contribute to the program – from 18 to 70 years and older.

The statements can be viewed online by creating a My Social Security account. People aged 60 and over who are currently not on benefits and who have not signed up for an online account should receive their statements in the mail three months before their birthday.

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With the redesigned layout, the Social Security Administration wants to make it easier for employees to find information at a glance and simplify the complex programs. Those statements are now also accompanied by fact sheets that focus on specific age groups.

The agency recommends that employees of all ages check their statements annually for accuracy.

That data also includes pointers on how to get the most of your benefits, experts say. In addition, there is additional information that is not in those statements that you should look for.

Retirement Benefit Estimates

The redesigned statements now have a blue bar graph with claim benefit estimates at nine different ages.

If you apply at age 62, you will receive permanently reduced benefits when you first become eligible.

The amount of your benefit checks increases for each year that you wait until the age of 70. If you claim your 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. That stops at age 70, because there is no increase for deferring benefits beyond that point.

The chart in the overview shows your expected monthly pension benefit from the age of 62 to 70.

“The blue bar form is a welcome addition for employees who need information to help them make good choices about their benefits,” said David Freitag, a financial planning consultant and social security expert at MassMutual.

Revenue record

The new statements also include a table of an employee’s earnings history, with Social Security and Medicare earnings broken down separately.

However, the new statement only includes 20 years of earnings, while the previous statement format included all years on an employee’s earnings record.

Sometimes people have a zero and they shouldn’t have.

Joe Elsasser

founder and chairman of Covisum

A full earning history is available on employees’ personal My Social Security accounts. Experts say looking at just 20 years is limited, and it’s important to go the extra mile to see your full earnings 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 employees to check their income history to make sure it reflects the correct amount earned each year and that nothing has been left out of your income.

“That’s a valuable exercise for people to make sure they don’t have misreported earnings,” said Joe Elsasser, founder and president of Covisum, a software company that claims Social Security.

“Sometimes people have a zero and they shouldn’t,” he said.

Seeing your full income history will also help you see how much of your benefits could be adjusted if you worked in jobs where you earned a pension and didn’t pay Social Security taxes. Those compensations are known as the windfall elimination provision or the state pension compensation and affect the benefits paid to both you and your family.

“The only solid way to test for WEP/GPO offsets is to review full earnings history,” Freitag said.

Disability and survivor’s 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 how much monthly income through survivor benefits your eligible spouse or minor children could receive in the event of your death.

Health Care Eligibility

The benefits summary will also let you know if you have earned enough credits to qualify for Medicare by age 65.

Even if you don’t retire at age 65, according to the Social Security Administration, you may need to register within three months of that birthday to avoid a lifelong penalty for late enrollment.