What Is a Social Security Benefit Statement?
If you are working and paying into Social Security, you should be receiving an annual benefit statement from the Social Security Administration. This statement provides a useful tool for retirement planning and offers information on Social Security benefits of which you may not be aware.
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Benefit Statement Timing
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When a worker reaches the age of 25 and has paid into the Social Security system, he will start to receive an annual Social Security Benefit statement. The statement will be mailed approximately three months before the individual's birthday. The statements are mailed to individuals who have made contributions into Social Security but are not yet receiving any benefits from Social Security or Medicare.
Estimated Benefits
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The inside first page of the Social Security benefits statement details the different payments you are currently projected to receive. The retirement benefits list the expected Social Security retirement amount if you retire at age 62, your full retirement age and at age 70. The disability benefits amount is the monthly payment if you become permanently disabled. Child and survivor benefits are the amounts a spouse caring for a child or a spouse who has reached retirement age would receive if the Social Security recipient died.
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Earnings Record
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The facing inside page of the benefits statement lists the amount of earnings that have been reported for the years worked and contributions made to Social Security and Medicare. The amount of earnings for each year should match your reported income for each of those years. The contribution amounts for Social Security and Medicare are the total you have paid in payroll deductions and the total amount your employers have paid into Social Security on your behalf.
Benefits Projections
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The projections of future Social Security benefits are determined as if your income level stays at the current rate until you retire and elect to start receiving Social Security retirement payments. Social Security retirement benefits are based upon the earnings in the highest 35 years. Once you have reached 35 total years in earnings, new higher-earning years will push out lower-earning years, increasing your retirement benefit levels.
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