Most of us go through life without being concerned with, or ever checking on, our Social Security records. We assume that the money deducted each payday plus the amount paid into the program by our employer is applied properly to this valuable retirement benefit.
The fact is, the Social Security Administration (SSA) receives a vast amount of paperwork each year. They can and do make errors and omissions. Unfortunately, the only way these problems are caught is if YOU catch them. Waiting until retirement may be too late to correct an error made 10 to 20 years ago. Common problems and their impact are:
Incorrect amounts. If the SSA does not receive a W-2 wage statement from an employer, you will not see credit for these earnings. Your Social Security retirement check amount averages your lifetime earnings. If you have earnings that are missing, your retirement check may be permanently lower.
Missing earnings. In addition to receiving credit for earnings, you need to work a certain number of quarters to be eligible for retirement benefits. Missing earnings reports reduces your number of working quarters. A few quarters may be the difference between receiving a benefit and receiving nothing.
The three-year correction time limit. Per the SSA, an earnings record can be corrected at any time up to three years, three months, and 15 days after the year in which the wages were paid or the self-employment income was derived. While there are exceptions for fraud and obvious clerical errors, why risk the hassle by not finding errors and fixing them when they happen?
Thankfully, it is now easier than ever to confirm the accuracy of your account, as the Social Security Administration has an online tool that allows you to review your historic earnings statements at www.ssa.gov. To use the tool, you will need to go through an online signup process that includes many safety measures to ensure your identity is protected.
If you see an error on your statement, you should immediately correct it. You can do this by contacting the Social Security Administration:
Social Security Administration Office of Earnings Operations
PO Box 33026
Baltimore, MD 21290-3026
Best practice: make reviewing your Social Security retirement account part of your annual tax filing process.
Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.