Remember when you used to get statements from the Social Security Administration about your earnings credits and the estimated benefit you would receive at retirement? Those went away during a federal budget crisis back in 2011, only to be partially restored last fall. They are now sent every five years, when workers turn 30, or 35, or 40, or…you get the idea.
But you don’t have to wait. The SSA has a neat online tool that lets you register and see your benefit and salary history immediately. It only takes a few moments to create a Social Security “My Account,” though you will have to submit your Social Security Number on the agency’s website. You might rightly feel squeamish about doing so, given recent stories of hacking at the IRS and other federal agencies. I wouldn’t blame you if you decide not to, but then, the Social Security Administration already has your SSN, so I’m not sure about the added risk of creating an account there.
Why would you want to do this? Primarily, it’s good to make sure you are getting proper credit for the taxes you are paying. Your Social Security benefit is calculated using a formula that averages 35 years worth of earnings, so if you are missing a year or two, that can really drag down your benefit.
You will hear from folks that a Social Security earnings statement can he an aid in discovering identity theft, though it’s not a terribly effective method. If you see added earnings credits for work you didn’t do, that could be a sign of a problem (even if that seems like a good thing). Often, however, if another person is working and earning money using your SSN, the additional earnings won’t end up on your account because the name won’t match — a situation that arises millions of times each year, often because undocumented workers are essentially sharing an SSN with its rightful owner. Those wage credits end up in something called the Earnings Suspense File, usually never to be heard from again.
The other reason to check your statement is to feel a little better about your retirement savings. Most people underestimate the Social Security benefit they’ll get at retirement, according to this story at Next Avenue. Of course, temper that good feeling with all the caveats that come with Social Security. Who knows what might happen to benefits between today and 20, or 3o, or 40 years from now, when you’ll need them?
Naturally, the Social Security Administration wants you to create an account and look at your earnings and benefit. It’s great PR for the agency — who isn’t happy to see how much money they’ll get? — and it also gives the agency a chance to clean up its data.