Yahoo Finance 7 Things You Can Do With a My Social Security Account
A my Social Security account allows you to review your contributions to the Social Security program. You can also get a personalized estimate of how much you will receive if you claim Social Security at various ages. Periodically reviewing your Social Security statement allows you to make sure your earnings are recorded correctly and to factor the likely payout into your retirement plans. More than 26 million people have created an account, according to the Social Security Administration. Here's why you should set up a my Social Security account.
[See: 10 Ways to Increase Your Social Security Payments.]
Check your earnings record. You can view a list of how much you earned during each year of your career. "Workers should check their Social Security statement once a year to verify the wage amounts posted to their record are accurate," says Nicole Tiggemann, a spokesperson for the Social Security Administration. Compare the salary on your Social Security statement to your tax documents annually, and take care to correct any mistakes so all your contributions get counted and factored into your retirement benefit. "It's the highest 35 years of covered earnings that count toward the benefit calculation," says John Palmer, a Syracuse University professor and former public trustee for the Medicare and Social Security programs. If you don't have at least 35 years of work listed, zeros are averaged into the final calculation.
See how much you have paid in. Most workers pay 6.2 percent of their earnings into the Social Security system, and employers match this amount. You can find out how much both you and your employers have paid into the Social Security and Medicare systems over your entire career using your my Social Security account.
Get an estimate of your retirement benefits. The SSA provides an estimate of how much you will receive in retirement at your full retirement age, which is typically age 66 or 67 depending on your birth year. Your account will also list the amount you are likely to receive if you claim a reduced payment at age 62 and how much your payment will grow to if you delay claiming until age 70. "In most situations it is advantageous to postpone because your benefit is higher at 70 than it is at 62," says Alicia Munnell, director of the Center for Retirement Research at Boston College. The estimates assume that you will continue to earn your current salary until retirement and could be different if your earnings change.
[See: 10 Places to Retire on a Social Security Budget.]
Find out how much you will qualify for if you become disabled. Your Social Security statement lists the amount you will be paid by Social Security if you develop a serious physical or mental impairment that prevents you from working at the job you had before the disability began or at another position you're qualified for. Benefit payments don't start until six months after the disability began.
Determine what family members will receive if you die. The children of people who are retired or disabled may also qualify for Social Security payments. If you pass away in the coming year, your dependent children and a spouse caring for your children will receive a specific amount each month that is listed on your Social Security statement. There might be a cap on the total dollar amount your family is eligible for. Your spouse and minor child could also be eligible for a death benefit.
Request documentation. A my Social Security account allows you to request a variety of documents, including a replacement Social Security card and a benefit verification letter. And after you sign up for Social Security benefits you can use the account to set up or change your direct deposit, update your personal information or get replacement tax forms. You can also download your Social Security statement at any time, instead of waiting for it to arrive in the mail. "People can use my Social Security to view their Social Security statement, which provides estimates of their future retirement, disability and survivors benefits," Tiggemann says. "Users may also download a copy of their Social Security statement to use with their financial advisor." Once you sign up for an account you will no longer be mailed paper statements unless you request them.
[See: 10 Social Security Claiming Strategies That Work.]
Keep your account secure. Workers age 18 and older are eligible to create a my Social Security account. But be prepared to provide some personal information to verify your identity. When you open the account for the first time you will be prompted to answer a series of multiple-choice questions that might include inquiries about financial products you own and previous addresses using data from the credit reporting agency Equifax. You can also add extra security to your account by electing to use a one-time code received via text message each time you log in.
10 Places to Retire on a Social Security Budget
Emily Brandon is the author of "Pensionless: The 10-Step Solution for a Stress-Free Retirement."
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