Redesigned Social Security Statement Reveals Early Retirement Opportunities – Community News
Social Security

Redesigned Social Security Statement Reveals Early Retirement Opportunities

WASHINGTON — If you’re old enough and have worked long enough, you may remember getting an annual Social Security statement in the mail about three months before your birthday, with estimates of your benefits.

But budget cuts put an end to the mailings for most employees. Now if you want to see your personal social security statement, you need to create an online account. If you don’t have an account, or you do have one, but you haven’t checked your statement lately, you should. The Social Security Administration has given the statement a makeover. It’s shorter — streamlined to two pages from the previous four — and thankfully better written.

“I give them a lot of credit for their efforts to make this more user-friendly and to explain various things, such as disability and survivor benefits,” said Joel Eskovitz, director of Social Security and Savings at AARP Public Policy Institute. “It’s a lot of information to get across and overall I think they did a really good job.”

The most useful change to the summary is a color bar chart that shows the estimated monthly retirement payments you would receive each year from age 62 when you first become eligible. Previous statements only showed the monthly amount at 62, your full retirement age, and an estimate of what you would receive by waiting until 70. The increases stop when you reach 70.

Eskovitz said the redesign helps clear up confusion about when to claim Social Security. Some people, who claimed early, believed their benefits would increase once they reached full retirement age.

If you claim your Social Security at 62, your monthly benefit drops significantly. And, with the exception of adjustments to the cost of living, you lock yourself in on the lower amount for the rest of your life. If you turn 62 this year and claim Social Security, your benefit would be about 29.2% lower than if you waited until your full retirement age of 66 and 10 months, according to an example from SSA.

If you can delay claiming your benefits, the new illustration of the annual benefit amount is a great reminder of why waiting can be worth it. Every year that you postpone beyond your full retirement age, until you are 70, you will receive an increase in your benefit. The percentage increase depends on when you were born. If you were born in 1943 or later, your benefit increases by 8% for each full year that you defer Social Security payments until after you have reached full retirement age.

The redesign includes factsheets modified with other information that people may have overlooked in the older, more closely-written version. It also includes a summary of some things you should know:

– You need at least 10 years of work (40 credits) to be eligible for a pension.

– Your benefit amount is based on your highest income for 35 years.

– If you have less than 35 years of salary, the years that you did not work count towards 0 and your benefit may be lower. If you go back to work, your benefit may increase.

– If you are divorced and have been married for 10 years, you may be able to claim a benefit from your ex-spouse’s file.

Reviewing your Social Security Statement regularly should be an important part of your retirement planning. To create an account, go to and look for the “my social security” signup link. If you have placed a security freeze, fraud warning, or both on your credit report, you will not be able to open the account until you lift the freeze. Social Security uses information in your credit file to verify your identity. Once you have created the account, you can freeze your credit report again.

According to SSA, about 63 million people have already created Social Security accounts online. But tens of millions of others do not receive the information essential to their retirement planning.

There is a bipartisan piece of legislation — the Know Your Social Security Act — that would force Social Security to continue sending annual income statements to the 180 million American workers between the ages of 25 and 60 who pay Social Security. Social Security will still send paper statements to employees 60 and older three months before their birthday if they are not receiving Social Security benefits and have not created an online account.

“We’ve always argued that it’s still better to get this through the mail, at least at certain ages, if they can’t do it annually like they used to,” Eskovitz said.

A Gallup poll earlier this year found that many Americans may not be very realistic about the main source of retirement income. Employees expect to rely more on their savings and investments in a workplace retirement plan, such as a 401(k). But in reality, retirees are heavily dependent on Social Security.

Fifty-seven percent of retired American adults say they rely on Social Security as a major source of income. Still, only 38% of non-retired people expect it to be a significant resource for them, Gallup said.

Even with the financial challenges Social Security faces, it will likely still be a major source of income for most workers in retirement. So apply for your social security statement. Make sure your earnings record is correct. View the monthly retirement benefit estimate to help you decide whether to collect sooner or later.

Michelle Singletary