Balancing Priorities

Do this during tax season to maximize your Social Security benefits

Tax season is a great time to make sure your Social Security statement accurately reflects your earnings history. You will have all the documents you need at your fingertips to correct any mistake.

The annual statement details how much you earned each year to estimate monthly benefits, which are based on an average of your highest 35 years of earnings. An error in your earnings history could cost you thousands of dollars in retirement.

"Just like you review your 401(k) statements, you need to check your Social Security statements because it is a big part of your retirement income," said David Freitag, a financial planning consultant at the MassMutual Financial Group.

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The Social Security Administration (SSA) processed 92,000 complaints about statements in fiscal 2016.

Those official figures may underestimate the number of statement errors. The Government Accountability Office found last year that the SSA often fails to give out key details to people that could cost them tens of thousands of dollars in retirement benefits.

The SSA recently stopped sending out paper statements to people under age 60 to save an estimated $11.3 million this fiscal year.

You can review your statement online with a My Social Security account. More than 26 million people have opened an online Social Security account.

Focus on the earnings record

Once you log in to your My Social Security account, the most recent earnings record that the SSA has for you will be displayed on the home page.

You can see your full earnings history by clicking on the link next to your last reported earnings estimate or the third tab on the header of the web page.

People should check their earnings history at least annually. Look closely at years where you had multiple employers because those estimates are more likely to be off, Freitag said.

How to fix an error

Found something wrong with your earnings record? The clock is running.

Officially, you have to correct errors within three years, three months and 15 days following the year of the mistake. Even if you missed the deadline, it may be worth it to contact the SSA because they have been known to bend the rules in some cases.

You'll need to prove what you've earned to have the SSA correct your record. A W-2 form, a tax return or a pay stub will suffice as evidence, which you may easily have on hand if you're double-checking your Social Security statements during tax season.

If you don't have any of those documents, at least have the name of your employer, the dates you worked and how much you've earned when you contact the SSA for an earnings history correction.