How to Check Your Social Security Benefits

Back in 1999, the Social Security Administration started annually mailing out a statement of estimated benefits to each individual 25 and older. But in 2011 they cut this program, and now you have to take the initiative if you want to get that information.

So why should you care about this? Whatever your feelings on Social Security, it’s a program we all pay into and should understand what we may get from it, so that we can use it as part of our planning. There are retirement, disability, life insurance and health insurance programs that we can qualify for, and it just makes sense to keep tabs on how our estimated benefits are changing over time.

I’ll be describing the process for viewing your estimated benefits online, but at the end you’ll have the option to save a copy for your records. For an example of what the downloaded copy looks like, you can check here. Although the formatting is different than the online version, the information presented is the same.

Step by step guide to accessing your estimated benefits statement

1. Go to http://www.ssa.gov/myaccount/

2. Click on the “my Social Security: Sign In / Create an Account” button.

3. Go through the process to create an account. This only takes a couple of minutes.

4. Once you have an an account, sign in and click on the “Estimated Benefits” button.

This brings you to a page that displays your current estimated benefits for several different Social Security programs.

How to read your benefits statement

For each program, you have an estimated monthly benefit based on your current earnings record. However, each program works slightly differently.

Retirement

You will only have estimated retirement benefits if you have at least 40 work credits. You earn a credit each time you make at least $1,160 in a single year, but you’re limited to four credits per year. So you will have to be working for a little while before you’ve qualified for any benefits.

Assuming you have enough credits, you will be presented with three estimated monthly payments, corresponding to whether you retire at:

1. Your full retirement age (which is 67 if you were born after 1959).
2. Age 70 (the point at which your retirement benefits stop growing).
3. Age 62 (the earliest age at which you can start receiving retirement benefits).

The later you start collecting benefits, the more you will receive. Many people will tell you that delaying Social Security is one of the best ways to secure a financially safe retirement.

Disability

Your disability is a single estimate for the monthly amount you would receive if you became disabled. What’s important to understand is that Social Security’s definition of disability is extremely strict. According to their website, you are only considered disabled if you meet each of the following criteria:

1. You cannot do the work that you did before,
2. You cannot adjust to other work because of your medical condition(s), AND
3. Your disability has lasted or is expected to last for at least one year or to result in death.

In other words, you are only considered disabled if you can’t do any kind of work and that condition is expected to last at least one year or the condition is expected to result in death. These are very tough conditions to meet, which is why it’s so important to look into purchasing your own long-term disability insurance policy.

Survivors

Survivors benefits are essentially life insurance provided by Social Security. This isn’t a benefit many people know about (I certainly didn’t until relatively recently), but it can actually be fairly significant. The benefits are broken down as follows:

1. Your child: the monthly amount your family would receive per child under the age of 18. If the child is disabled, there is no age limit. The money goes to the child’s guardian (typically the surviving spouse).
2. Your spouse who is caring for your child: the monthly amount that goes to your surviving spouse if they are caring for your child who is under the age of 16. This is in addition to the amount per child.
3. Your spouse, if benefits start at full retirement age: the monthly amount that your spouse can receive at retirement.
4. Total family benefits: the maximum monthly amount that would be paid out to your family. You will typically get to this maximum if you leave behind a spouse with two young children.

This benefit can be extremely helpful to parents who are considering the need for life insurance. When we were determining the amount of life insurance we needed, we factored this in at 50% of the estimated benefit, just to be on the conservative side.

Medicare

This simply tells you whether you have or have not qualified for Medicare. You will typically qualify for Medicare at the same point that you’ve qualified for retirement benefits.

Save a copy for your records

At the very bottom the screen, you can click on the “Print/Save Your Full Statement” Link. This will allow you to save a copy for your records. It’s definitely worthwhile so you have a point of reference if you check again in the future and something doesn’t look right.

Double-check your earnings record

As a last task before you leave, you can scroll back up to the top of the page and click on the “Earnings Record” tab. This page summarizes the amount you earned each year that contributed to your Social Security benefits. It’s important that they have this right, as this is what determines your estimated benefits. If anything looks wrong, follow the directions on the page to try and get it corrected.

Summary

When people talk about Social Security, it’s typically just the retirement benefits that come up. Those are certainly a big part of the program, but for parents especially the life insurance can be a more immediate and crucial component. Staying up on your benefits and understanding how they’ve changed as you progress through the years is an important part of making sure your financial plan has considered all potential sources of income and insurance protection.