Retirement requires loads of planning, from building a healthy nest egg to deciding what age you want to leave the workforce.
While most of these retirement plans take years or even decades, some moves require very little time at all. And there’s one Social Security move that only takes a few minutes, but it could have an enormous effect on the rest of your retirement: Checking your estimated benefit amount.
Why check your benefit amount before you retire?
It’s possible to see how much you’re expected to receive in Social Security benefits, even if you’re still years away from retirement.
There are two important reasons to check your estimated benefit amount before you retire. For one, you can double-check that there are no errors in your earnings record, ensuring you receive the correct amount in benefits. In addition, it will make it easier to plan for retirement.
Social Security benefits make up around 30% of the average retiree’s income, according to the Social Security Administration. When you have an idea of how much you’ll receive in benefits each month, it’s easier to determine how much you’ll need to save on your own. If you were to go into retirement with no idea what you’ll collect in benefits, you risk not saving enough to make ends meet.
To check your benefit amount, you’ll first need to create a mySocialSecurity account, if you haven’t already. From there, you can view your statements to see an estimate of your future benefit amount based on your real earnings.
Keep in mind that this amount isn’t set in stone, and it could change by the time you retire — especially if your income changes significantly between now and retirement. But when you have an estimate of roughly how much you’ll receive, it’s far easier to plan your financial future.
What if your benefits are falling short?
If you check your benefit amount and find that you won’t receive as much as you expected, there are a few things you can do.
First, double-check that your earnings record is correct. If the Social Security Administration does not have an accurate record of your income or if you haven’t paid Social Security taxes, your benefit amount may be lower than it should be.
If everything is correct, then there are a few other ways you can increase your monthly benefit amount, including boosting your income or working a few more years. Your benefits are calculated based on the 35 highest-earning years of your career. To maximize your payments, make sure you’ve worked at least 35 full years before you begin claiming.
Another option is to consider delaying Social Security benefits by a few years. You can begin claiming as early as age 62, but the longer you wait (up to age 70), the more you’ll receive each month. Delaying benefits isn’t feasible for everyone, but if you can swing it, you could boost your payments by hundreds of dollars per month.
Social Security benefits can be a lifeline in retirement, so it pays to make sure you’re earning as much as possible. By taking a few minutes to check your estimated benefit amount, it will be easier to plan for a more comfortable retirement.
