New Social Security payments announced for 2025 – How to calculate your check, retiree
According to Lagradaonline, Given the significance of Social Security in retirees’ lives, one would expect most Americans to be aware of their potential benefit amounts upon retirement. However, recent research from the National Institute on Retirement Security (NIRS) reveals a concerning reality: only 11% of non-retired Americans know exactly how much they will receive in benefits. Furthermore, 24% are “not very sure” about their benefit amounts, while 22% have no idea at all.
This lack of knowledge poses a challenge for future beneficiaries, as understanding Social Security benefits is crucial for effective retirement planning. Being proactive in this regard can significantly improve one’s quality of life once on a fixed income.
How to Get Your Social Security Benefit Estimate
Tyler Bond, research director at NIRS, emphasizes the straightforward process for obtaining this vital information. He advises that workers visit the Social Security Administration (SSA) website, log into their accounts, and access their future benefit estimates. Unfortunately, many workers have yet to take this step and lack a clear understanding of their potential benefits.
Anyone aged 18 or older can create a “My Social Security” account to review their records. For individuals aged 60 and over without an online account, a paper statement can be requested, which will be mailed directly to them.
What Your Social Security Statements Will Show
Joe Elsasser, a certified financial planner and president of Covisum, a Social Security claiming software company, explains that these statements are particularly beneficial for individuals between the ages of 62 (the earliest age to claim benefits) and 70 (the latest age to delay). The statements detail how annual cost-of-living adjustments (COLAs) could impact monthly benefit checks.
While everyone can benefit from this information, Elsasser notes that this demographic is especially well-served by understanding their potential living standards. “The best way to think about it is, what kind of living standard would Social Security provide if you continue to work and earn wages that keep pace with inflation?” he advises.
However, it’s important to note that these statements can only reflect current information and cannot predict future wages or significant cost-of-living changes. Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator, asserts, “The closer someone is to age 62, the more accurate the estimates become.”
How to Make Statements More Accurate
To enhance the accuracy of these statements, it’s essential to ensure that your earnings history is correct and accurately reflects your wage history. It’s much easier to rectify mistakes as they occur than to attempt corrections years later when records may be lost.
If discrepancies are found, correcting them is straightforward. Simply take the correct W-2 form to your local Social Security Administration office. Additional documentation such as tax returns, wage stubs, pay slips, or personal wage records can also help verify your information. However, even with accurate records, you might still receive less in benefits than expected due to potential shortfalls in the Social Security Trusts. Payroll taxes are expected to sustain some portion of allocated benefits, but full amounts may not be guaranteed unless Congress takes steps to bolster the program.
As Elsasser warns, “It’s totally reasonable to expect a benefit cut for younger people. However, planning as if benefits won’t exist at all is a poor assumption.”
Conclusion
Understanding your Social Security benefits is essential for effective retirement planning. By taking the initiative to review your statements and ensure your earnings history is accurate, you can better prepare for your financial future.
