February 16, 2016 — Even if you are not retired yet you have probably received several statements from the Social Security Agency over the years. That is because the Agency mails Statements to workers at ages 25, 30, 35, 40, 45, 50, 55, 60 and older. They go out three months prior to their birthday (but not if they receive Social Security benefits or have a my Social Security account).
The statement contains an amazing amount of helpful information. Unfortunately, that info is often ignored or misunderstood. In fact one survey found
that only one-third of workers close to retirement age who had been receiving statements for years could accurately estimate how much they would receive. We recommend that you be one of those who make good use of these facts and advice. Specifically, you can use that info in two important ways:
– To help you make a decision about when you will start taking your retirement benefits. The statement gives you an estimate of how much you receive in benefits at various ages: 62, normal retirement age (66 for most boomers), and 70.
– To get an idea of your future retirement finances, and adjust if necessary. You can do that by plugging your expected benefit into a budget, along with estimates for your other retirement income and expected living expenses.
Let’s take a look at the Statement
The sample below shows what someone might expect in benefits at various retirement ages. Obviously, the closer you get to those ages the more accurate the estimate will be. Note how much higher the age 70 benefit is. If you would like to be able to see your Statement online, as well as do other things, you can sign up at https://ssa.gov/myaccount/.
Here is a link to the full sample statement.
You can also produce your own estimate with the Social Security Benefit Estimator, or by using this one from consumerfinance.gov. Workers who do not want to wait for their scheduled mailing can request your Social Security Statement by following these instructions.
Here are some of the features of the Statement
– Your estimated benefits (see example above)
– Your earning history (a snapshot on your life!)
– How your benefits are estimated
– Facts about Social Security, such as how your benefits are calculated
– Sample benefit amounts by age (see below)
– What is the best option for you
– What happens when you work and take Social Security
– Retirement Age considerations
Your Social Security benefits statement is useful to a successful retirement. Take advantage of yours when it comes in the mail, or go online and get it. If it looks like your retirement is not going to be comfortable, consider steps early to get better situated.
Comments? Have you been studying your Social Security benefit statement? If someone asked you how much you were going to receive at your target retirement age, could you give an accurate answer? Please share your thoughts in the Comments section below.