Social Security is an important income source for many seniors. And chances are, you’ll end up relying on your benefits once your time in the workforce wraps up.
That’s why you may be motivated to snag the highest possible monthly benefit. And there are steps you can take to achieve that goal, like avoiding an early filing and boosting your earnings throughout your career to set yourself up with a more generous benefit down the line.
But one silly mistake on your part could result in a lower Social Security benefit for life. And the worst part? It’s a blunder that’s really easy to avoid.
Do your legwork
Each year, the Social Security Administration (SSA) issues workers an earnings statement that contains lots of key information. For one thing, it will include an estimate of your future monthly Social Security benefit. Furthermore, it will summarize your yearly wages that count for Social Security purposes.
If you’re 60 years of age or older, you’ll receive your annual earnings statement in the mail. Otherwise, you can create an account on the SSA’s website and access yours there. But either way, it’s important to review that information and make certain it’s accurate. If you don’t, you could end up shorting yourself on benefits.
How so? Let’s imagine your income is severely underreported one year, only you don’t catch that mistake. The SSA will then use that incorrect information to calculate your monthly retirement benefit — and you could get stuck with a lower benefit than what you’re really entitled to.
That’s why it pays to make yourself a note on your calendar to check your Social Security earnings statement once every year. That quick, simple task could help you avoid what could end up being a substantial hit to your benefits.
Other ways to avoid losing out on Social Security
Checking your earnings statements every year isn’t the only step you can take to avoid lower benefits. You can also make a point to not claim Social Security before full retirement age, even though you’re allowed to file for benefits as early as age 62.
You can also make certain you put in a full 35 years in the workforce. That’s because your benefits are based on your 35 most profitable years of earnings, and if you don’t work 35 years, you’ll have zero income factored in for each year you didn’t earn money. Similarly, if you don’t settle for a low-paying job but rather, push yourself to build skills to snag a better one, you can avoid getting stuck with a monthly benefit that just doesn’t cut it once retirement rolls around.
But perhaps the easiest way to avoid a hit to your benefits is to check your earnings statement every year. Doing so is also important because the closer to retirement you get, the more accurate your monthly benefit estimate is apt to be. And that could be a key piece of information that helps with your retirement planning.
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