Whether an employee is ready to retire, just joining the workforce, or somewhere in between, regularly reviewing a Social Security earnings record could make a big difference when it’s time to collect retirement benefits.
Just think, in some situations, if an employer did not properly report just one year of an employee’s work earnings to the Social Security Administration, future benefit payments from Social Security could be close to $100 per month less than they should be. Over the course of a lifetime, that could cost tens of thousands of dollars in retirement or other benefits to which the employee is entitled.
Social Security prevents many mistakes from ever appearing on an earnings record. On average, SSA processes about 236 million W-2 wage reports from employers, representing more than $5 trillion in earnings. More than 98 percent of these wages are successfully posted with little problem.
It is ultimately the responsibility of employers — past and present — to provide accurate earnings information to Social Security so employees get credit for the contributions they have made through payroll taxes. SSA relies on employees to inform them of any errors or omissions. These individuals are the only ones who can look at their lifetime earnings record and verify that it is complete and correct.
So, what is the easiest and most efficient way to validate an earnings record?
Visit www.socialsecurity.gov/myaccount to set up or sign in to a personal my Social Security account;
Under the “My Home” tab, click on “Earnings Record” to view the online Social Security Statement and taxed Social Security earnings;
Carefully review each year of listed earnings and use personal own records, such as W-2s and tax returns, to confirm them; and
Keep in mind that earnings from this year and last year may not appear yet.
Check out the one-page fact sheet at www.socialsecurity.gov/pubs/EN-05-10081.pdf for information on how to correct an earnings record.
Sooner is definitely better when it comes to identifying and reporting problems with an earnings record. As time passes, employees may no longer have past tax documents and some employers may no longer be in business or able to provide past payroll information.
If it turns out everything in an earnings record is correct, use the information and online calculators at www.socialsecurity.gov/planners/benefitcalculators.html to plan for retirement and prepare for the unexpected, such as becoming disabled or leaving behind survivors. SSA uses a person’s top 35 years of earnings when calculating benefit amounts. Learn more about how SSA calculates benefits at www.socialsecurity.gov/pubs/10070.pdf.
SSA is with employees throughout life’s journey, from starting that first job to receiving the well-earned first retirement payment. Learn more about the services they provide online at www.socialsecurity.gov/onlineservices.