What did you do with that envelope that used to arrive once a year with estimates of your future Social Security benefits? You might have reviewed the information. You may have even filed the statement away as a reference. Now, this powerful financial planning tool is as close as the nearest computer.
“Often, people don’t think of their Social Security statement when thinking of their financial well-being,” says Rod Griffin, director of public education for Experian. “But your statement can be a valuable financial planning tool.”
Your SSA statement is now available online at www.socialsecurity.gov/mystatement. It provides an estimate of the amount of Social Security benefits you could receive upon retiring, but it can also help you with retirement savings strategies, estate planning and making decisions about disability insurance.
Retirement Savings
Knowing how much your Social Security payments will be can help you better understand how much you’ll need to save in other vehicles to fund your lifestyle during retirement. After reviewing your statement online, you may decide to adjust your 401(k) contributions, open an IRA or seek other avenues for funding your retirement.
The statement can also help you work with your current employer to ensure they’re withholding the appropriate amounts.
Estate Planning
Your online statement will also give you an estimate of how much your survivors might be eligible for if you die. This information covers both spouses and minor dependent children.
“This could be useful information when you’re planning how you will financially take care of your loved ones if you pass away,” Griffin says.
Estate planning often involves considering what sources of income will be available to survivors, and knowing how much Social Security benefits yours could be eligible for can help in the planning process.
Disability Decisions
According to the SSA, 62 is the earliest age people can collect a reduced Social Security retirement payment, and the full retirement age is 67 for people born after 1960. But a 20-year-old worker has a three in 10 chance of becoming disabled before reaching retirement age, and the average age of people receiving Social Security disability benefits is just 53 years old.
If you have a health problem that you know will lead to disability, knowing how much you could expect to receive from Social Security may help you make decisions about how much disability insurance you’ll need.
With the availability to access your Social Security earnings and benefit information online, it’s easier than ever to make use of this important financial planning tool. The SSA uses Experian’s fraud prevention services to securely authenticate and safeguard the identities of people accessing their earnings and benefits information online.
To access your statement, go to www.socialsecurity.gov/mystatement, create an account and provide the information as prompted. You’ll be able to access your benefit information and even see a history of your annual earnings for every year. For more information on how to live financially smart, go to www.livecreditsmart.com.
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