Your Social Security Statement

In the past, one of the biggest aggravations of Social Security was getting an accurate estimate of the benefits you could expect to receive after retirement. But the agency has streamlined the process and greatly simplified the paperwork of your account. An entire rundown of your benefits is spelled out in a document called the Personal Earnings and Benefit Estimate Statement, or more simply known as your Social Security Statement. By law, you should automatically receive a Statement annually if you have a Social Security Number, are age 25 or older, have any job earnings on record and are not already receiving benefits (including Medicare). You can also request a Statement at any time on the SSA's website. When you receive your Statement, it should contain this list of estimates:

  • Your monthly retirement benefit amount from Social Security, at your stated retirement age. To arrive at this figure, the Social Security computer assumes that your future annual earnings (net inflation) will rise at the national average of 1% per year. The earliest that you can start to receive your check is at age 62 - if you're willing to settle for 70- to 75% of what your benefit would be if you continue to work until you're 65.
  • The full retirement age (FRA) benefit you could get by waiting until age 65 to retire. Under Social Security regulations, 65 was the standard retirement age until the year 1999. After that year, the age for collecting a full benefit amount began to rise at the rate of nearly one month per year. For example, a person born in 1942 must now wait until ten months after his or her 65th birthday in order to be eligible for full retirement benefits. The full-benefit age will continue to increase until it reaches age 67 in 2027, where it will remain.
  • The larger benefit available to people of your age who continue working until they reach age 70.
  • Your survivors' monthly benefits if you die during the current calendar year. Children of Social Security taxpayers are likely to be eligible for these benefits until they reach age 18 or 19, generally depending on when they finish high school. A spouse who stays at home with the children can also collect survivors' benefits until the youngest child turns 16. By taking an outside job, however, a widow or widower will probably forfeit Social Security income.
  • Your disability benefits if you are unable to work for at least a year or if you're terminally ill. Disability benefits also include income for dependent children.
  • A year-by-year breakdown of your earnings that were subject to Social Security taxes and the Social Security taxes that you paid. Since the Social Security Administration has certainly been known to make occasional errors in figuring benefits, you should check the numbers on your Statement against your own earnings records. The Statement will also explain briefly what it takes to become eligible for benefits. Basically, you must work for ten years to earn retirement benefits, and you generally must work at least five of the last ten years to claim disability benefits.