You know your birthday is not far away when you get your Social Security benefits statement in the mail. It’s four pages of information that explains your benefit and how it can vary in different situations. The Social Security Administration has sent this statement out yearly to American workers over age 25 since 1999. Well, most people will no longer be getting these statements automatically. As a cost-saving measure, the Social Security Administration has announced plans to mail out automatic statements only to workers over age 60. However, your local Social Security office will still be able to give you a copy of your benefits statement. The Social Security Administration is working to make the statements available online as well. Meanwhile, you can get an estimate of your benefits by visiting http://www.ssa.gov/estimator/.
Checking your benefits statement each year is a useful tool for your financial planning. One thing it shows is how much more you can gain in benefits by waiting a few years to claim your Social Security benefits. For example, depending on when you were born, you could gain a 32% higher monthly benefit by waiting to claim at 70 instead of 66. The statement also shows your earnings for each year of your work life. Your benefit is based on the top 35 years of earnings. If you were out of the workforce for several years, you could potentially earn a much higher benefit by working full-time for at least a few more years and replacing some of those zeros with higher numbers! Social Security planning is particularly important for women, who tend to earn less than men but live longer. So pay attention to what your benefits statement tells you, and consider taking action to increase what is a very important source of income for most American workers.