Why You Should Check Out Your Social Security Statement Frequently?

Americans have been misled by Social Security Administration officials for years about how much their benefits will be.

Fortunately, the Social Security Administration has just replaced its four-page Social Security Statement with a more user-friendly, visually appealing two-page version.

To find out the crucial, clear information you need for your retirement, please visit the Social Security website.

Alternatively, you can log in or set up an account on the site by visiting your “my Social Security Account”. By contrast, you cannot view your Statement until you reach the age of 60.

“The Statement is streamlined and contains clear messaging and makes it easy to find information at a glance,” Social Security Administration Acting Commissioner Kilolo Kijakazi stated.

“So, we’re hoping this will help simplify what can be complex programs for the public.”

Economics professor Laurence Kotlikoff, an expert in Social Security, explained that there are 2,728 rules in the Social Security Handbook and 11 types of Social Security benefits.

He believes that at least half of people who claim Social Security “are making major mistakes.”

According to Forbes, the new Social Security Statement contains a couple of important enhancements that will simplify social security and its benefits to recipients.

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Social Security Statements Major Improvements

Personalized Monthly Retirement Benefit Estimates is a simple, colorful, and easy-to-understand bar chart. Former versions of the Statement may have led you to believe that it was a good idea to claim Social Security as soon as possible – at age 62 – or at Full Retirement Age. However, the new chart shows why you should delay filing if you can.

If you delay claiming Social Security benefits after your Full Retirement Age, until age 70, you will get an 8% bonus.

Through its bar charts, the Social Statement highlights the importance of delayed claims.

If, for instance, a 1960-born person continues to earn $50,000 a year until he or she starts receiving benefits, claiming at 62 would result in a $1,050 per month benefit, but waiting to 70 would result in a $1,860.

“People should be aware that if they retire early, that means an actuarial deduction the amount they’re going to receive and that continues on to the rest of their retirement,” Kijakazi explained.

“Having that visual makes it clear instinctively for people what their choices are as they make their [claiming] decisions.”

Earnings Record that is unique to you. Most of the earnings you earn each year are now listed on your Social Security statement, and some of the earlier years of employment are bundled. You can view your earnings for any given year in your “my Social Security” online account.

Benefits for survivors. If you die within the year, the Statement shows exactly how much your surviving spouse or minor children could receive in Social Security benefits.

What You Need to Know About Social Security Benefits, a bulleted list. This explains that after the death of a married person, the age at which they claimed benefits will determine the amount paid to their surviving spouse.

Analysts’ thoughts on social security

The new statement by AARP’s Gary Koenig, vice president of financial security, states it “is much better than where it was.”

A major reason he appreciates the Social Security Administration’s decision to stop using the phrase “early retirement benefits,” which he finds “frankly misleading.”

But he would have preferred the agency to mention “a minimum benefit versus your maximum benefit.”

Phil Moeller, co-author of “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” grades the Social Security Statement “a solid B.” He likes the new graphics but wishes the claiming rules were explained in more detail.

However, a Social Security Administration staffer informed him that the agency is in the process of including on its sample Statement benefit estimates, taxes paid, and earnings records that “are more representative of a real-life scenario.”

Premier Social Security Consulting’s Jim Blair applauds how the new Statement provides better information about early claiming benefit reductions.

The new Social Security Statement was reviewed by Martha Shedden, co-founder of the National Association of Registered Social Security Analysts.

In her view, the document’s short length, layout, and color scheme are helpful, “which make it easier for workers to quickly understand their benefits.” She also praised the Statement’s “Retirement Ready Fact Sheet” which includes links, rather than obscure information, about Social Security claiming rules.

However, she stated, “I would like to see more emphasis — bold or colored text — on the fact that these personalized estimates are based on your earnings to date and assume you continue to earn $xx, xxx per year until you start your benefits.”

“Good” visual improvements, Kotlikoff said, but he had a few complaints.

The first is: “I don’t like that you can’t make a PDF of your entire earnings history to check if it’s right,” he said. Shedden complained about this, too.

According to the Social Security Administration, they are in the process of updating the Statement to give people more information about their earnings history.

In addition, Kotlikoff criticized “the slightly ridiculous and potentially highly unrealistic” economic assumptions behind the projections for an individual’s Social Security benefits.

“They assume no inflation in the future and no wage growth in the economy forever,” he said. Kotlikoff continued, saying Social Security presumes “that you’re going to work up until you retire.”

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Is It About Time to Mail Out Social Security Statements Again?

AARP and other Social Security analysts argue that the government should mail Social Security statements to every 25 year old and older, as it did until about 10 years ago.

Kijakazi said it won’t happen now.

“If we were to mail statements to all people twenty-five and older, it would increase our costs — print and mail — to between eighty million and ninety million dollars per year,” she explained.

She also pointed out that a bipartisan bill in Congress calls for a return to paper statements for workers older than or at 25 years old and are not receiving Social Security benefits.

“If the bill were to become law, we would work diligently to be mailing as fully as possible. But yet there is a substantial cost,” she added.

At the same time, look at your Social Security Statement to ensure that it is correct and to find out what benefits you might receive in the future. Contact the Social Security Administration at 800-772-1213 if you find any errors in your earnings record.

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