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5 Essential Facts on Your Social Security Statement

Whether you receive a paper statement or view it online, look for these important pieces of information.

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Studio shot of social security card and banknotes
Tetra Images/AlamyYour Social Security statement contains your earnings record, which lists the amount you made during each year you worked.
By Emily Brandon

The Social Security Administration is planning to resume mailing Social Security statements to some workers beginning in September. The paper statements will be sent to workers ages 25, 30, 35, 40, 45, 50, 55 and 60 who aren't registered for online statements or currently receiving benefits. These previously annual mailings to workers were suspended in April 2011 to save money, and the ability to view statements online was added in May 2012. Here's how to make the most of your benefit statement.

How much you will get when you retire. Most Social Security statements contain an estimate of how much you will receive if you sign up for Social Security at your full retirement age, age 62 and age 70. The full retirement age is 66 for most baby boomers and 67 for everyone born in 1960 or later. "The statement shows clearly that the longer you wait to claim benefits, the more you get each month," says Jonathan Peterson, executive communications director at AARP and author of "Social Security For Dummies." "Over time, the difference can be many thousands of dollars. So it makes a lot of sense to look at the projections at different retirement ages and think about what they mean for you." For example, a worker eligible for $1,680 a month at age 67 would get just $1,159 monthly at age 62, but his benefit would increase to $2,094 each month if he delays signing up until age 70. However, it's important to note that these benefit estimates assume Social Security law will remained unchanged and that you will continue to earn your current salary, both of which could change in the future. The statement will also let you know if you haven't yet worked long enough to qualify for benefits.

What happens if you become disabled. Social Security benefits aren't just for retirees. Your statement will also tell you the benefit amount you will be eligible for if you become disabled in the coming year.

What your family will get if you die. Social Security pays out benefits to families when a breadwinner passes away. Your dependent children and a spouse caring for those children will likely both be eligible for payments upon your death, and the amount they will get is on your statement. Your spouse may also be eligible for retirement benefits based on your work record, even if you die before retirement. A spouse or minor child may additionally be eligible for a one-time death benefit when you pass away.

Your earnings record. Your Social Security statement typically lists every year you have worked and how much you earned. "Sometimes your income does not get properly reported to Social Security," says Brian Vosberg, a certified financial planner and author of "The Complete Retiree's Guide to Social Security." "Checking annually will help guarantee accuracy." The 35 years in which you have the highest earnings are used to calculate your retirement payout.

Your Social Security and Medicare contributions. Under your earnings chart, the statement lists the total amount you have paid into Social Security and Medicare throughout your career. It's a good idea to double-check these amounts to make sure you are getting credit for your contributions. Workers are required to pay 6.2 percent of their pay into Social Security up to $117,000 and 1.45 percent of all earnings into Medicare in 2014, which employers match. Self-employed workers pay 12.4 percent of their earnings into Social Security and 2.9 percent into Medicare. And those who earn more than $200,000 ($250,000 for couples) pay an additional 0.9 percent in Medicare taxes.

Of course, you don't have to wait for your paper statement to arrive in the mail. Workers age 18 and older can view their Social Security statements online at any time, although you will need to verify your identity by answering questions about personal information to create an online account. "Set up your access like any other financial site, and check your Social Security data any time you want," says Andy Landis, author of "Social Security: The Inside Story." "I even have the SSA mobile app, just like mobile banking."

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.


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