What Does a Social Security Statement Look Like?
How Do I Download or Get My Social Security Statement?

Here’s how you download your social security statement online:

1. Go to http://ssa.gov/

2. Go to the Popular Services menu on the left side of the page and click on Get your Social Security Statement online, OR click on the tab just to the right of the Home tab which is conveniently labeled “my Social Security”. Alternatively, you can simply notice the box labeled my Social Security just to the right of Popular Services menu and click on it. Seemingly, all roads lead to where you are trying to go.

3. Click anywhere on the box that says: Sign In or Create an Account

4. Follow the instructions

Early in the process, you will encounter a statement that reads as follows:

You must be able to verify some information about yourself and:

Have a valid E-mail address,
Have a Social Security number,
Have a U.S. mailing address, and
Be at least 18 years of age.

You can create an account only to gain access to your own personal information. You cannot use this online service to access the records of a person:

With whom you have a business relationship;
For whom you are a representative payee; or
For whom you are an appointed representative.

Unauthorized use of this service may subject you to criminal or civil penalties, or both.

This means that technically you cannot ask your financial advisor, attorney, CPA, or son-in-law to create your account for you without exposing them to possible criminal or civil liability. If you don’t have online access, or if you are unable to verify your identity online, you may visit your local Social Security office to obtain your statement. On the other hand, if you’re not prepared to do this yourself and your son-in-law is inclined to be a scofflaw, you can simply choose to ride shotgun while he opens the throttle.

Meanwhile, I had minimal problems when I logged in. I learned that the password is good for only 180 days, so I had to invent a new one, but when that was done I was in the clear.

Assuming that you are successful in creating your online account – and the most difficult part might be coming up with a password that fits their specifications – you may access your statement at any time.

What Does My Social Security Statement Mean?

Highlights of Your Social Security Statement

There is a lot of information in your statement, but I’m going to focus on what I consider to be the most important points.

Your Estimated Benefits

If you’re like me, whenever you receive a new statement you make a beeline to page 2. I always wanted to see what my benefits would be if I claimed them at certain key ages, and whether those amounts had grown since the previous statement. Starting at the top, under Retirement, I would look at (but didn’t really see) the following language: “At your current earnings rate, if you continue working until…” I would then see figures estimating my benefits if I were to claim them at 62, at Full Retirement Age (FRA), and at 70.

If you are past 62 years old on the date the statement is published the benefit ages shown will be your current age, your FRA, and 70. If you are past FRA, the ages shown will be your current age and 70. But the key point here is that those estimates are based on the assumption that you will continue to work and earn the same amount that you earned in the last year recorded on your Earnings Record (on page 3).

In fact, if you look at the last few lines above the thick line that divides this section from the next, you will see in bold print: “We based your benefit estimates on these facts:” Then you will see your date of birth and, if it’s a recent report, the amount of “Your estimated taxable earnings per year after 2016.” “Taxable earnings” means earnings that are subject to Social Security taxes. What appears next is the amount SSA assumes you will earn each year going forward, all the way to the particular age for which an estimate is given.

Of course what this means is that if you earn less than the assumed amount, or for fewer than the assumed number of years, those benefit estimates may be significantly overstated. Conversely, if you earn more than the assumed amount the estimates may be understated. The older you are, the more likely it is that the estimates will be on target. Keep in mind that the benefit estimates use current dollars and do NOT assume Cost of Living Adjustments.

How Your Benefits Are Estimated. You need 40 “credits” over your working life to qualify for Social Security retirement benefits on your own record. You earn one credit for each $1,260 (in 2016) of Social Security taxed earnings, up to a maximum of 4 credits in a single calendar year if you earn at least $5,040. The first line on page 2 tells you whether or not you have earned 40 credits.

In the old days, a credit was called a “quarter,” leading to another misconception: the erroneous impression that one must earn at least $1,260 in each of four quarters to receive 4 credits in a single year. In point of fact someone, for example a commission-based salesperson, could earn $5,040 in a single day and thereby amass their yearly maximum of 4 credits all at once.

What is not mentioned in the statement is that earning 40 credits simply gets you a ticket to the game. Your potential benefits are based in large part on the average of your highest 35 years of inflation-adjusted Social Security earnings – even if some of those years are zeroes!

The remainder of page 2 is devoted to a brief discussion of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These may have serious consequences for you and your spouse if you if you are receiving, or will receive, a pension based on employment earnings that were not subject to Social Security taxes.

Let’s say that you worked for 20 years in a school system that had opted out of the Social Security system to participate instead in a state pension system. You will soon begin receiving a teacher’s pension of $3,000 per month. During those 20 years, your earnings were not subject to Social Security taxes. Even though you may have another 20 years of Social Security covered employment earnings, WEP will cause your potential Social Security retirement benefits (and your spouse’s spousal benefits) to be reduced in accordance with a specific formula. WEP reductions are not reflected in the benefit estimates on your statement. Of course, your average earnings will also be impacted, as all the years of earnings that were not covered by Social Security will count as zeroes in your Earnings Record. That fact is reflected in the benefit estimate.

GPO affects any spousal or survivor benefits to which you might otherwise have been entitled, requiring those benefits to be reduced by 2/3 of the pension you are receiving from non-covered employment. If your non-covered pension is substantial, the GPO can completely eliminate your ability to receive spousal or survivor benefits.

Your Earnings Record

On page 3 you will find the complete history of your covered Social Security earnings from your first W-2 through the most recent year for which earnings were recorded. Whether it’s accurate or not, it provides the foundation upon which your benefits are calculated. BE SURE TO CHECK YOUR EARNINGS RECORD TO ENSURE ACCURACY.

There are slightly different versions of this warning on page 1 of the hard copy you receive in the mail and the statement you can download when you’ve established your online account. “Check out your earnings history,” reads the online statement, “and let us know right away if you find an error. That’s important because we base your benefits on our record of your lifetime earnings.” The mailed copy says: “Please read this Statement carefully. If you see a mistake, please let us know.” On the bottom of page 3 the warning is repeated in more detail.

At first blush this seems like little more than patronizing boilerplate, but in 2012 I looked at my wife’s Earnings Record and noticed a big fat zero in 2010. Since I was keeping the corporate books and doing the taxes I knew that her earnings were more than zero in 2010. I produced the W-2 and she went down to our local SSA office with the evidence. Within a very few weeks, the statement was updated to include her actual earnings for 2010. Ensuring the accuracy of your Earnings Record can be particularly important if you do not have a robust 35-year Social Security work history. And the sooner you pick up the discrepancy the easier it is to document and correct.

You will notice two sets of numbers in the Earnings Record: Your Taxed Social Security Earnings and Your Taxed Medicare Earnings. The first of these is the one to which I pay closer attention. If you earned quite a bit more than is shown in some years, it may be because your earnings exceeded the taxable wage base. In 1991, for example, the wage base was $53,400. 1991 was also the year when the ceiling on earnings for Medicare tax purposes was lifted. If you notice that the Medicare Taxed Earnings exceed the Social Security Taxed Earnings in any year after 1990, it is probably because you hit the ceiling for Social Security Earnings. If you did not, it may be because your employment was not “covered” and no Social Security taxes were paid on your earnings. In both 2015 and 2016, the maximum amount of Taxed Social Security Earnings is $118,500.

Page 4 touches very lightly on retirement, disability, family, and survivor benefits, some of which may turn out to be important to you. My recommendation: just keep them in the back of your mind and seek good professional advice if you think you or a family member might qualify for additional benefits.

Receive benefits and still work … This is the last section of the statement I will address specifically. If you claim your benefits before FRA an earnings limit ($15,720 in 2016) applies if you receive any type of benefit other than disability. Earnings above the limit will result in some or all of your current benefits being withheld, but those amounts may be recaptured over time after you reach FRA.

After you reach your FRA, you may work to your heart’s content and earn unlimited amounts while receiving Social Security benefits without any negative impact. In fact, depending on your Earnings Record, additional years of high earnings can actually cause your benefit to increase. Again, this is an area that calls out for some good advice and sound planning.

How Do I Estimate my Social Security Benefits Online?
I Heard that Social Security Will Go Broke by 2034. Should I Wait Till 70 or Should I Cash in Now?

There is always confusion around this time of year when the Social Security Board of Trustees releases its annual projection. Many people interpret the possible depletion of trust fund reserves 18 years from now as meaning that no benefits will be payable after the reserves are exhausted. That is not the case.

Here is a quote from the 2016 SSA press release:

“The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2034 – the same as projected last year. At that time, there will be sufficient income coming in to pay 79 percent of scheduled benefits.”

This represents a small improvement since 2013, when the Trustees projected that the reserves would be depleted in 2033, after which continuing tax revenues would be sufficient to pay about 75 cents for each dollar of scheduled benefits.  In other words, even if the Social Security Trust Fund “goes broke” the ongoing payroll taxes should be sufficient to fund about 75-80% of the benefits that we expected to receive.  The reserves would have paid the balance of the promised benefits had the trust been appropriately funded.

All of this is based on the assumption that Congress will not act effectively. If it does not, that will mean we will all get less than 100% of the benefits we were expecting to receive. If it does act, we should get what we were promised.

I can’t tell anyone what they “should” do, but I decided to wait until 70 to collect my benefits. If the sky falls, I would rather get 75-80% of my projected age 70 benefits than a similar percentage of age 66 or 67 benefits. More important, I expect my spouse to outlive me by quite a few years, and the survivor benefits she will receive will be significantly higher if I wait until 70, regardless of whether the trust fund is adequately funded or “goes broke.”

For those reasons, I believe that the possible depletion of trust fund reserves should not enter into Social Security claiming decisions in the vast majority of cases.

What is My Primary Insurance Amount (PIA)?
  • Your PIA is the foundation of most Social Security benefit calculations.
  • It is based on your highest 35 years of inflation-adjusted earnings.
  • Your PIA is the amount you would receive if you were to claim your benefits at your Full Retirement Age (FRA).
  • If you claim before FRA, your benefits are reduced; if you delay claiming until after FRA, your benefits are increased
  • If you continue working after you reach your FRA, and your ongoing annual earnings become part of your highest 35 years, you can expect your PIA, and your benefits, to increase – whether or not you have begun receiving benefits
  • If you have fewer than 35 years of earnings, the missing years will count as zeros in the 35-year average.
How is My Primary Insurance Amount (PIA) Calculated?
  • SSA takes your Earnings Record and indexes each year up to age 62 for inflation.
  • They add your highest 35 years of indexed earnings and divide by 420 (the number of months in 35 years) to determine Average Indexed Monthly Earnings (AIME).
  • Depending on the size of your AIME, it is separated into one, two, or three tiers.
  • If you turned 62 in 2014, for example, the first tier covers AIME up to $816; the second tier covers AIME from $817 to $4,917; and the third tier includes AIME over $4,917. $816 and $4,917 are the “bend points” of the 2014 PIA formula. 90% of the first tier is included in your PIA, as is 32% of the second tier and 15% of the third tier.
  • Translating these monthly amounts into average annual earnings, 90% of the first (roughly) $10,000 of average annual earnings goes into your PIA; 32% of the next $49,000 of average annual earnings goes into your PIA and 15% of everything over $59,000 is also included.
How Do I Determine My Full Retirement Age?

Full Retirement Age (FRA) is entirely determined by your date of birth. As you can see from the table below, if you were born on or before January 1, 1955, your FRA is 66. If you were born after January 1, 1960, your FRA is 67. If you were born between those two dates, you can find your FRA in the table.

Date of Birth Full Retirement Age
1/2/43-1/1/55 66-0
1/2/55-1/1/56 66-2
1/2/56-1/1/57 66-4
1/2/57-1/1/58 66-6
1/2/58-1/1/59 66-8
1/2/59-1/1/60 66-10
1/2/60 and later 67-0

For purposes of collecting survivor benefits only, add two years to the numbers in the table to determine your FRA.

What Is The Earliest Time I Can Claim Retirement Benefits?

It is technically true that you may claim your retirement benefits when you reach age 62. However, there are two rules that prevent over 90% of claimants from receiving benefits until they have reached age 62-1 (meaning 62 years, 1 month).

The first of these rules provides that you must be 62 for the entire month to be eligible for benefits. In real life, only people who were born on the first day of a month would qualify for benefits at age 62; the rest of us would have to wait until the following month. But now it gets even stranger.

In the world of Social Security, a person “attains” a given age at 12:00 a.m. on the day before their actual birth date. Thus, if you were born on the second day of any month you will be treated as though were born at 12:00 a.m. on the first. If you were born on the first day of a month you will be treated as though you had been born at 12:00 a.m. on the last day of the previous month.

What this means is that the only people who can claim at age 62 are those who were actually born on the second day of the month, because they will be treated as being 62 for that entire month. If you were born on any day other than the second, you must wait until age 62-1.

But the best day to have been born for the purposes of claiming early is the first day of the month. You will still have to wait until age 62-1, but you will receive your first payment at the same time as a claimant who was born on the second of the month – AND your benefits will be reduced (for early claiming) a little less than the claimant who was born on the second.

What are Delayed Retirement Credits?

Delayed Retirement Credits (DRCs) are increases in your monthly Social Security retirement benefits if you delay claiming benefits based on your own Earnings Record until after you have reached your Full Retirement Age – or if you suspend benefits after FRA.

  • For every month you delay claiming past FRA, your benefit grows by 2/3% of your PIA per month (8% per year) until you reach age 70 or begin receiving payments, whichever occurs earlier.
  • If you claimed benefits before FRA, you may suspend benefits anytime between FRA and age 69 and 11 months for the purpose of earning DRCs.  In that case, your benefit grows by 2/3% per month of your benefit amount at the time you suspended.

DRCs apply only to retirement benefits claimed on your own record.  They do NOT apply to spousal or survivor benefits, which means you do not earn DRCs on those benefits by waiting past Full Retirement Age to claim them.

What are Spousal Benefits?

As you will see, this is a very big question.  The simplest answer is that under certain conditions you may be eligible to receive benefits based on the Social Security earnings record of your current spouse.  [You may also be eligible to receive survivor benefits on the record of your deceased spouse, but that is covered in a separate question.]

Here are some of the basic rules:

  • You must have been married for at least one year.
  • You must be at least age 62.
  • Your spouse must have claimed his or her own benefits.
  • If your spouse suspended benefits after April 29, 2016, you cannot claim spousal benefits until your spouse has resumed receiving benefits.
  • A husband and wife cannot both collect spousal benefits at the same time.
  • If you are not receiving benefits on your own record, any spousal benefits you receive are based on 50% of your spouse’s PIA.
  • If you are receiving benefits on your own record, the total of your own benefits and any spousal benefits cannot exceed 50% of your spouse’s PIA.
  • Spousal benefits may be reduced by up to 30% if claimed before you reach FRA (age 66). If your FRA is higher than 66, benefits may be reduced by up to 35%.

As a result of legislation enacted in 2015, there are now two sets of rules regarding spousal benefits – in addition to the above.  Which rules apply to you depends on your date of birth.

If you were born on or before January 1, 1954, you are “grandfathered” under the pre-existing rules.

  • If you apply for benefits before your FRA you are treated as if you applied for your own reduced benefits AND spousal benefits, i.e., you may not restrict your application to spousal benefits only.
  • In this case, you may be eligible for reduced spousal benefits in addition to your own benefits – but only if your PIA is less than half of your spouse’s PIA.
  • If you delay claiming retirement benefits until FRA, you may restrict your application to spousal benefits while your own benefits continue to grow. This is true regardless of the size of your PIA in relation to your spouse’s PIA.

If you were born on or after January 2, 1954, you are subject to the new and more restrictive rules.

  • Whenever (before or after FRA) you apply for benefits you are treated as applying for your own benefits and spousal benefits, if you are otherwise eligible. In other words, you will never be able to restrict your application to spousal benefits.
  • You will be eligible for spousal benefits only if your PIA is less than half of your spouse’s PIA.

 All of the above rules are subject to modification if the Social Security Earnings Test or the Government Pension Offset applies to you.

Who Can Qualify for Divorced Spouse Benefits?

You may be eligible for divorced spouse benefits if (1) you are currently unmarried, and (2) the divorce occurred following a marriage that lasted at least 10 years, measured from the date of the wedding to the date on which the divorce became final.

If you meet these two requirements, all of the rules governing spousal benefits (as described in the previous FAQ) apply, with the following variations:

  • Your ex-spouse must be at least 62, but not necessarily receiving benefits.
  • If your ex-spouse is not “entitled” to (i.e., has not yet claimed) his or her own benefits, you must have been divorced for at least two years.
  • Divorced spouses can both collect divorced spouse benefits at the same time.

The same grandfathering rules that govern spousal benefits apply here as well.

  • If you were born on or before January 1, 1954, and you delay claiming until your FRA, you may restrict your application to spousal benefits only while your own benefits continue to grow, regardless of the size of your PIA in relation to your ex-spouse’s PIA.
  • If you were born on or after January 2, 1954, you can never collect divorced spouse benefits if your PIA is 50% or more of your ex-spouse’s PIA.

All of the above rules are subject to modification if the Social Security Earnings Test or the Government Pension Offset applies to you.

What Benefits are Available to a Surviving Spouse?

Survivor benefits may be payable to a variety of people when your spouse dies, but in this case the discussion is limited to benefits payable to you as a surviving spouse.

Benefits are based on several factors:

  • Your spouse’s Earnings Record.
  • Whether and when your spouse had already claimed retirement benefits before the date of death.
  • Whether you wait until your FRA to claim survivor benefits or claim them before FRA, and if so how long before.

Survivor benefits are generally available if your spouse was “fully insured.”  Typically that is satisfied if he or she had earned at least 40 credits, but lesser amounts of credits are required if death occurred at an early age.  There are a variety of special situations that are not discussed here, but following are some of the basic rules.

  • If your spouse was receiving retirement benefits that began on or after FRA, full survivor benefits are equal to the amount he or she was receiving at the time of death.
  • If your spouse was receiving reduced retirement benefits as a result of having claimed them before FRA, full survivor benefits are equal to the larger of the following:
  1. the amount he or she was actually receiving at the time of death; or
  2. 82.5% of your spouse’s PIA

If your spouse was not receiving retirement benefits at the time of death, full survivor benefits are equal to the larger of the following:

  1. Your spouse’s PIA, which may have to be specially computed by SSA if death occurred before age 62.
  2. The amount your spouse would have received if he or she had claimed benefits for the month in which death occurred.

If you are the surviving spouse:

  • You must have been legally married to the decedent for at least 9 months at the time of death.
  • You must be at least 60 years old (50 years old if you are disabled under the Social Security rules) to receive benefits.
  • You must be unmarried OR, if you remarried, the remarriage must have occurred after you turned 60 (50, if you are disabled).

The amount of your survivor benefits is calculated as follows:

  • If you claim survivor benefits at or after FRA, you will be eligible to receive 100% of the full survivor benefits.
  • If you claim survivor benefits at age 60 the amount will be reduced by 28.5% of the full survivor benefits. If you claim survivor benefits after age 60 but before FRA, the reduction will be pro-rated.

If you are the surviving spouse and have in your care your spouse’s child who is (1) under 16 years old or (2) is disabled, you may be eligible for mother’s or father’s benefits equal to 75% of your spouse’s PIA.  The age 60 limit is not applicable to these benefits, which end when the child turns 16, you remarry, or you begin receiving survivor benefits or retirement benefits that are larger than the mother’s or father’s benefits.  The size of your benefits may be reduced if the Family Maximum Amount would otherwise be exceeded.

All of the above rules are subject to modification if the Social Security Earnings Test or the Government Pension Offset applies to you.

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