Fixed Income

Social Security online statements provide key information to help you boost your benefits

Key Points
  • Efforts are underway to improve Social Security's online services, including benefit applications.
  • The Social Security Administration also recently revamped its online benefit statements.
  • Those records could hold clues for how to get the most out of your benefits, experts say.
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The Social Security Administration recommends beneficiaries visit its website as the first stop for service as the agency works to reopen its field offices.

But many people are reluctant to apply for benefits online. Only about half of retirees have used that method since 2013, according to the Center for Retirement Research at Boston College.

That's even as the Social Security Administration has ramped up its tools for online applications, and it's expected to continue to do so following a recent executive order signed by President Joe Biden.

There's also another valuable resource — newly redesigned online benefit statements — that may hold key information for boosting your Social Security retirement benefits.

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The statements can be accessed online by creating a My Social Security account. People age 60 and up who do not currently receive benefits and who have not signed up for an online account should receive their statements in the mail three months before their birthday.

With the redesigned layout, the Social Security Administration aims to make it easier for workers to find information at a glance and simplify its complex programs. Those statements are also now accompanied by fact sheets tailored to specific age cohorts.

The agency recommends that workers of all ages check their statements annually for accuracy. That goes for workers of all ages who contribute to the program — from 18 to 70 and up.

Those records also hold clues for how to get the most out of your benefits, experts say. Plus, there's additional information that's not included in those statements that you should seek out.

Retirement benefit estimates

Workers looking for guaranteed retirement income
Workers looking for guaranteed retirement income

The redesigned statements now have a blue bar graph including benefit estimates when someone is claiming at nine different sample ages.

If you claim at age 62, when you first become eligible, you take permanently reduced benefits.

The amount of your benefit checks will increase for each year you wait up to age 70. If you claim at your full retirement age — generally 66 or 67, depending on your year of birth — you will receive 100% of the benefits you earned. Wait past that age, and your benefits will increase even more. That stops at age 70, as there's no increase for delaying benefits past that point.

The chart included in the statement shows your projected monthly retirement benefit amount from ages 62 through age 70.

"The blue bar form is a welcome addition for workers who need information to help them make good choices about their benefits," said David Freitag, a financial planning consultant and Social Security expert at MassMutual.

Earnings record

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The new statements also include a table of a worker's earnings history, with earnings taxed for Social Security and Medicare broken out separately.

However, the new statement includes only 20 years' worth of earnings, while the previous statement format included all of the years on a worker's earnings record.

A full earnings history is available on workers' personal My Social Security accounts. Experts say looking at just 20 years is limiting and it is important to take the extra step to see your full earnings history.

Social Security calculates your average monthly earnings based on your 35 highest-earning years.

But errors can happen. The Social Security Administration and other experts advise workers to check their earnings history to make sure it shows the correct amount earned each year and that none of your income has been omitted.

"That's a valuable exercise for people to do to make sure they don't have any misreported earnings," said Joe Elsasser, founder and president of Covisum, a Social Security claiming software company.

"Sometimes people have a zero, and they shouldn't have," he said.

Seeing your full earnings history can also help tell you how much of your benefits may be adjusted if you worked in jobs where you earned a pension and did not pay Social Security taxes. Those offsets are known as the Windfall Elimination Provision or Government Pension Offset and affect both you and your family's benefit eligibility.

"The only solid way to test for WEP/GPO offsets is to see the entire earnings history," Freitag said.

Disability and survivor benefits

In addition to retirement benefit eligibility, the statement also provides estimates as to what your monthly income would be if you claimed disability benefits.

There are also estimates for how much monthly income through survivor benefits your eligible spouse or minor children may receive if you pass away.

Medicare eligibility

The benefits statement will also let you know whether you have earned enough credits to qualify for Medicare at age 65.

While it is not mandatory to enroll in Medicare Part B when you reach that birthday, not doing so may trigger delays or higher monthly premiums in some circumstances, the Social Security Administration notes.