This Simple Task Could Spare You a Reduced Social Security Benefit

There’s a good chance you’ll end up relying pretty heavily on Social Security in retirement. This holds true even if you bring some savings with you into retirement.

The reality is that many seniors wind up spending more than anticipated once their careers come to an end. Part of the reason boils down to healthcare costs. Not only do medical issues tend to arise as people age, but Medicare costs have been climbing steadily, making it harder for seniors to keep up.

Also, it costs money to stay busy and content in the absence of having a job. And so having a higher Social Security benefit could spell the difference between getting to enjoy retirement or winding up bored and restless.

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It’s for this reason that it pays to do whatever you can to snag as generous a monthly benefit as possible. And one simple move could help you avoid a needless reduction in your Social Security income.

Make sure your earnings history is accurate

The amount of money you’re entitled to in Social Security isn’t just arbitrary. Rather, it’s based on your personal wage history — specifically, the amount of money you earn during your 35 highest-paid years in the labor force.

But if the Social Security Administration (SSA) has incorrect wage data on record for you, it could result in a lower monthly benefit — for life. And that’s why it’s crucial to spend a few minutes each year checking your earnings statement.

Your annual Social Security earnings statement will contain a summary of your wages each year, as well as an estimate of your future monthly benefit. But if your wages are ever underreported or improperly recorded by accident, it could leave you with a lower benefit to collect in retirement.

How might that happen? First of all, administrative mistakes can occur at random where, say, your annual wage of $90,000 just doesn’t get recorded at all. But having a $0 on file instead of $90,000 could have significant consequences when it comes to calculating your future monthly benefit.

You may also run into a situation where you switch jobs during the year and one employer forgets to report your income. In that case, the result could be the same — a lower monthly benefit down the line for no good reason.

That’s why it’s so important to check your annual earnings statements for errors, and to contact the SSA if you spot any information that isn’t accurate. Doing so could spare you a reduction in benefits that hurts you throughout retirement.

How to access your annual earnings statement

If you’re 60 or older, the SSA will send you a copy of your earnings statement by mail each year. If you’re younger, you can create an account on the SSA’s website and access that document there.

If you spot a mistake, like underreported wages, you may need to provide the SSA with copies of your W-2 or tax return to get that information corrected. But it’s a step worth taking if it means avoiding a hit to your benefits that hurts you financially throughout retirement.

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