Social Security is only one of four sources for your income during retirement, but it is an important source. You must monitor your Social Security benefits both before and during retirement.
In 2011 the Social Security Administration (SSA) stopped mailing benefit information to workers, thus saving the program some $70 million each year. Workers now must go online and open an account with SSA to get that vital information. The account is called “my Social Security.” Here’s how to open an account: Go to SocialSecurity.gov; click on “my Social Security” (upper left); click on “create an account” (top center). The process will ask you several personal questions that only you should know. You then create a user name and password.
SSA will send you a confirmation email plus a letter via the postal service. Once you have your account, you will access to your information.
If you are not yet receiving payments, you can see estimates of your retirement, disability, and survivors benefits; your earnings record; and the Social Security and Medicare taxes you have paid. This information is useful as you plan your financial future.
If you already receive benefits or have Medicare, you can obtain a benefits verification letter; check your benefit and payment information: and view your earnings record. This also is the place where you can change your address and bank deposit information.
Retirement used to be a three-legged stool – pension, personal savings, and Social Security. Now it is a four-legged stool – pension or 401(k) or similar programs, personal savings, Social Security, and earnings on your 401(k) and personal savings after the time your stop work.
One decision of great import is when should you begin to receive your Social Security benefits. Generally, you can begin as early as age 62. If you wait until your “normal retirement age” (varies depending on your date of birth, mine is 66), your starting payment will be higher. For those not yet receiving Social Security, this information will be listed as an estimate (because the final depends on how much you earn in the intervening years). In addition, benefits will increase by 8% a year between ages 66 and 70 if you delay the start of monthly checks (now electronic deposits only). Little known is that once you reach your normal retirement age, you can voluntarily suspend your benefits and reinstate them later taking advantage of the 8% increase. It is “a bird in the hand vs. two in the bush” decision.
As always, things change at the SSA so monitor your “my Social Security” account to see what happens.
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