Most people don’t think about their Social Security record until it’s time to apply for retirement, disability or survivors benefits. By then, you may find that you should have taken action that would have made a difference in the amount of benefits you collect.
The amount of your monthly benefit is based on your level of earnings, so if you report lower earnings, you will get lower benefits. If the earnings record is wrong, your retirement benefits will be wrong, too. It’s that simple.
Situations that may result in unreported earnings include failure to report a name change or errors in the wages reported.
The Social Security system is financed through taxes paid by workers and their companies, and also by the self-employed. The taxes you pay go to the Internal Revenue Service. The IRS sends a report of the taxes paid to Social Security. Your employer sends a report of the wages paid to you to Social Security.
Errors can happen. That’s why you need to take steps to protect your earnings record and ensure that it becomes an accurate representation of your working years. The annual Social Security statement you receive about three months before your birthday is designed to assist you in doing this. It shows the earnings listed to your record and estimates the benefits you would receive based on those earnings. You should study the information and, if you find an error, contact us as soon as possible.
You also should review the W-2 forms you receive from employers you have worked for during the past year. Check the earnings listed, as well as your name and Social Security number.
You need to be aware of special reporting situations that affect some types of earnings. Tips, farm work, household work and self-employment earnings all have special reporting rules that determine when the earnings are reported and how. You can download fact sheets on these subjects from our website at www.ssa.gov, or call our toll-free number, 1-800-772-1213, and request a copy.
The steps you take now to protect your Social Security earnings record can help you make a smooth transition to retirement or make it easier to apply for disability or survivors benefits. That’s worth a little extra effort.
Social Security Manager, Jersey City