Understanding Your Social Security Benefit Statement

It's crucial that you carefully read, check and utilize your Social Security benefits statement. Most people will quickly glance at their benefits statement at most before filing it or throwing it away, and many Americans aren't even receiving their benefits statement.

Below, we'll cover what's in the statement and why you should check it, how to correct any errors on the statement and how to use it in your financial planning.

What's in a Social Security Benefit Statement

Your Social Security benefit statement gives you two basic pieces of extremely useful information. It provides you with:

• A record of your earnings history and an estimate of how much you and your employer paid in Social Security taxes
• Estimates of benefits you (and your family) may be eligible for now and in the future

Using these two pieces of information, you can find out your expected benefits, check for any errors, and intelligently plan for your financial future.

Requesting Your Social Security Benefit Statement

The Social Security Administration (SSA) has made it much easier to get a copy of your benefit statement. They provide three ways to request one:

• Login to their online system to request your statement over the internet at: http://www.socialsecurity.gov/statement/ and click the Request a Social Security Statement button at the bottom of the page
• Download and fill out a Social Security Statement request form (SSA-7004) and mail it to the address on the form. The form is located at: http://www.ssa.gov/online/ssa-7004.html
• Contact the SSA at 1-800-772-1213.

Correcting Errors on Your Social Security Benefit Statement

The first thing you should do when examining your Social Security benefit statement is to verify the information it contains. This includes checking that your name is spelled correctly, that your Social Security Number is correct, ands ensuring that the earnings reported are accurate. Errors in reporting are not as rare as you might hope, and mistakes could keep you from getting all the Social Security benefits you have earned.

If you do find errors on your statement, the SSA advises you to call them immediately at 1-800-772-1213 and asks that you have your W-2 or tax return available for the years in question.

Use Your Social Security Benefit Statement to Plan

Your benefit statement should be used to plan for your financial future and retirement. In combination with your savings, investments and other pensions, your Social Security benefits can give you an accurate picture of what your expected income should be when you retire.

In addition, general information on your benefit statement will advise you on all the protections that Social Security offers you, even before you retire. While most Americans will not use Social Security until they retire, your benefit statement will describe how it may be used by younger workers (and their families) if you should become disabled or die before you reach retirement age. The statement will also provide you with general guidelines and advice to ensure that you remain eligible to receive Social Security.