Your Social Security retirement benefits are an essential part of your financial security in retirement. However, you may be at risk of losing or under-receiving these benefits if you overlook one important task: verifying your earnings record. Ensuring that the Social Security Administration (SSA) has accurate information about your earnings is critical to securing the benefits you’ve earned over your lifetime. Without this step, you could face lower payments or even missing benefits.
This guide explains why verifying your earnings is vital, how to do it, and other important tips to help you maximize your Social Security benefits.
Why Verifying Your Earnings is Crucial
The SSA calculates your Social Security benefits based on your top 35 years of earnings. If some of your income is missing or incorrect, it can lower your monthly benefit amount significantly. In some cases, you might not receive benefits at all if the errors are not corrected.
Example:
Maria worked part-time at two jobs during her career. Upon reviewing her Social Security Statement, she found that her earnings from these jobs were missing. If she had not addressed this, she would have lost $200 a month—totaling $2,400 annually.
Steps to Protect Your Benefits
1. Access Your Social Security Statement
Your first step in protecting your benefits is to review your Social Security Statement, which details your earnings and projected benefits. To do so:
- Visit the official SSA website.
- Log in or create a My Social Security account.
- Navigate to “Earnings Record” to check the income reported for each year.
Tip: The SSA recommends reviewing your earnings record yearly or when you change jobs.
2. Verify Your Earnings
Once you access your earnings record, look for discrepancies such as:
- Missing earnings from part-time or seasonal work.
- Incorrect self-employment income.
- Errors due to employers not reporting wages properly.
3. Correct Errors
If you spot an error, take the following steps:
- Contact the employer involved to confirm they submitted your earnings to the SSA.
- Gather evidence such as pay stubs, W-2 forms, or tax returns to support your claim.
- Report the error to the SSA by calling their helpline at 1-800-772-1213 or submitting the documents by mail or in person.
Since the correction process can take several months, it’s important to act quickly.
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Additional Tips to Maximize Your Social Security Benefits
1. Understand the Windfall Elimination Provision (WEP)
The WEP reduces benefits for people who also receive pensions from jobs that didn’t pay into Social Security, such as certain public-sector jobs. To minimize its effect:
- Aim for 30 years of substantial Social Security-covered earnings.
- Regularly review your earnings record to ensure all qualifying years are accounted for.
- Use the SSA’s WEP Planner to understand its impact on your benefits.
2. Delay Retirement for Higher Benefits
Delaying your Social Security benefits can significantly increase the amount you receive. Here’s how it works:
- If you start benefits at age 62, they’ll be reduced.
- Waiting until your full retirement age (FRA) ensures you get 100% of your benefits.
- Delaying beyond your FRA boosts your benefits by about 8% annually until age 70.
Example:
John’s monthly benefit at FRA (67) is $2,000. If he waits until 70, his benefit increases to $2,480, a 24% boost.
3. Understand Spousal and Survivor Benefits
You might qualify for spousal or survivor benefits if you are married, divorced, or widowed. Here’s what to know:
- Spousal Benefits: You can claim up to 50% of your spouse’s benefits if they are higher than your own.
- Survivor Benefits: Widows or widowers may be entitled to up to 100% of the deceased spouse’s benefit.
Check with the SSA to understand how to maximize these benefits.
Social Security Updates for 2025
Be aware of new rules for 2025 that could affect your Social Security payments. There are also discussions about possible tax changes, including eliminating taxes on Social Security by 2025, so stay informed.
Frequently Asked Questions (FAQs)
- How do I know if my earnings record is accurate?
Review your Social Security Statement annually. If your reported income matches your W-2 forms or tax returns, your record is likely correct. - Can I still fix errors after retirement?
Yes, you can correct discrepancies after retirement. However, it’s best to resolve them as soon as possible to avoid delays in receiving accurate benefits. - What documents are needed to fix an error?
You may need documents like pay stubs, W-2 forms, or tax returns. The SSA will provide guidance based on your situation. - Does self-employment income count for Social Security?
Yes, self-employment income counts toward Social Security, but you must ensure you’ve paid the required Self-Employment Contributions Act (SECA) taxes. - How can I estimate my future Social Security benefits?
Use the SSA’s online Benefits Calculator to get an estimate of your future benefits.
Common Mistakes to Avoid
- Neglecting Your Statement: Failing to review your earnings record can lead to costly errors.
- Delaying Error Resolution: The longer you wait, the more difficult it can be to gather supporting documentation.
- Underreporting Self-Employment Income: Make sure to report all self-employment income accurately to avoid penalties and benefit reductions.
By staying proactive about verifying your earnings record and understanding the rules, you can protect and maximize your Social Security retirement benefits.