Understanding Your Social Security Statement

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Do you wonder how you’ll manage your money when you retire? If so, your Social Security statement can be a helpful tool in planning your family’s finances. Have a taken a look at it recently?

A Bit Of Background Information And History

Since 1999, statements have been automatically mailed to all workers over age 25 who haven’t yet received benefits.

The statement is mailed to you about three months before your birthday. And, you’ll keep getting it every year until you begin taking benefits.

What’s The Point Of It?

The statement is designed to keep you informed of your earnings history, which are used to calculate your benefits. It also shows how much you’ve paid in social security and medicare taxes.

With this statement, you can ensure the accuracy of the Administration’s records. So if you do find mistakes in your earnings, notify the Administration well before you retire.

What Else It Includes

When most people think about social security, they think about what they’ll get during their retirement. But it’s more than just a retirement program. It also provides benefits if you were to become disabled, and supports your family – both when you retire and after you die.

What It Isn’t

Although social security is the largest income source for elderly Americans, it was never intended to be the only source of income when you retire.

It’s also important to remember that your statement only shows an estimate. The actual amount you receive may differ due to several factors

  1. Your future earnings may increase or decrease.
  2. Your benefits will be adjusted for cost-of-living increases.
  3. Laws governing benefit amounts may change.
  4. Your benefits may be affected by pensions earned in which you didn’t pay Social Security tax.

Can We Trust In It?

According to the administration, more benefits will be paid out than collected through taxes starting in 2016. Without changes, funds will be exhausted by 2037. Then retirees will only get 76 cents for each dollar of scheduled benefits.

Certain people think some form of social security will be around when they retire. Others don’t count on it. But whether you think it will or won’t, I think it’s still important to know what benefits are included.

So we can’t be certain of the availability of social security. And it isn’t meant to be our only source of retirement income anyway. This reinforces the need for us to be proactive about saving on our own for retirement, rather than relying on social security alone.

We do this tried-and-true way – by getting out of debt, building up savings, and investing for the future.

Where To Get More Information

If you have more questions, you can set up appointments with local offices through their toll-free number. In addition, you can request a statement at any time by visiting the social security website.  You can also do additional research on how to increase social security benefits.

Even with this estimate, you may still want to know how to calculate social security benefits in retirement. This can give you a better idea of what to expect.

Do you review your annual Social Security statement?

Photo by stevendepolo


  1. says

    You make a great point when you say that SS was never meant to be our only source of retirement and we should not look at it that way. We must provide for our own retirement and then if we get SS it will be a bonus!

  2. says

    Thanks Rich. You may be on to something when you approach any social security benefits as a bonus. This could help us from having unrealistic expectations.

  3. says

    I look at my statement everytime it comes. Unfortunately, I took a significant pay cut two years ago to my current job, but before that it was fun to see my earnings go up each year since college.

  4. says

    Amanda, good job keeping up with your statement!

    As far as taking a pay cut, the good news is that if you still have years (or even decades) to spend in the workforce, there’s time to increase your earnings if you choose to.

  5. says

    Sorry, I guess I hit the wrong button on my comment above.

    Personally, I don’t count on SS to help fund my retirement at all. Any money that’s left for me will be a bonus.

    I read that the Social Security Administration has said that we actually paid out more than collected this year – 6 years earlier than originally anticipated!

  6. says


    That’s a bit of an alarming statistic. But it reinforces the need for us to be proactive about ensuring our own comfortable retirement. Thanks for sharing that.

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