The Social Security Administration wants to make it easier for U.S. workers to understand their future benefits — so the agency redesigned benefit statements, and it wants everyone to check them annually.
Social Security statements aren’t just for the retired — these useful documents explain to recipients what they can expect in future benefits and help detect any mistakes. Changes include a bar graph showing estimates for benefits at nine different ages (from ages 62 to 70), as well as how to report an error after reviewing the document.
“We redesigned the statement to make it easier for you to read and find the information you need,” the SSA said on its website. Americans of any age can create a profile on the Social Security Administration’s site – some experts suggest they should do so sooner rather than later to thwart hackers from gaining access to such sensitive information.
The statements also offer insights into disability and survivor benefits, information on Medicare and taxes paid into the system.
See: Find out what Social Security knows about you
These statements should be checked annually, the administration said. For people preparing for retirement, an estimate of future benefits allows them to make sense of how much money they’ll receive in their old age – as well as how much they’ll need to save to supplement their retirement income.
For younger Americans not quite near retirement, checking these statements is one way to ensure no mistakes were made about work and earnings. Benefits are based on numerous factors, one of which is how much workers earn — the wrong amount could result in less money in future benefits.
Also see: Should I claim Social Security at 70, or take it earlier and invest the money?
These statements also allow people to see the impact of the age at claiming benefits. Every U.S. worker has a Full Retirement Age, which varies based on month and year of birth. At Full Retirement Age, or FRA, an individual receives 100% of the benefit she is owed. Anyone who claims earlier than FRA gets a permanent reduction of that benefit, and anyone who delays claiming up until age 70 sees an increase in benefits.
Claiming strategies should incorporate various factors, such as financial need, health and longevity. Someone who expects to live only until age 70 or 75 may want to claim sooner, even if it means a reduced benefit, because they won’t get to enjoy the benefit for long. Someone with enough savings, who is healthy and expects a long lifespan may want to hold off on claiming. When a retiree claims Social Security can also impact spouses’ potential benefits.