How do I know how much I have accumulated in my Social Security?

Whether you work in a dependency relationship or autonomously, Surely you are wondering “how do I know how much I have accumulated in my social security?”. It is important to know how the money for your retirement is being collected.

Social Security is an incredibly important program for America’s seniors. Benefits paid by Social Security account for about a third of all income among the elderly, and for most beneficiaries, Social Security accounts for 50% or more of their income.

Because Social Security is so important to the financial well-being of most seniors, how to know how much you have accumulated in your social security, is an intelligent doubt. For this, the Social Security Administration (SSA or Social Security Administration) makes available the famous “social security income statement”. But first let’s see what Social Security is, keep reading that we explain everything below.

What is Social Security?

In general, the term social security describes a program that uses public funds to provide a degree of economic security to the public. Social Security is the United States government program established in 1935 that provides old-age, disability, and survivors’ insurance, as well as supplemental security income, an income for the elderly or disabled.

In the United States, employers and employees must pay Social Security taxes. The money collected from these taxes goes primarily to provide benefits for those who have reached retirement age or are currently eligible. In this way, today’s workers provide funds for people receiving benefits today, and when today’s workers retire, then (at least in theory) workers will provide the funds.

You receive Social Security benefits based on the amount of Social Security taxes you have paid, which, up to a certain maximum amount, is based on your income. People who have had higher earnings tend to receive higher Social Security benefits. But Social Security also pays a disproportionate amount to low-income people. They need the money more, and a dollar they pay in Social Security taxes provides them with higher benefits than a dollar paid by a top official. In this way, Social Security in principle provides for those in need.

Keep reading: The best retirement plans in the United States

What are Social Security benefits?

Social Security benefits are payments made to qualified retirees and disabled persons, and to their spouses, children, and survivors. Social Security, officially the Old-Age, Survivors, and Disability Insurance (OASDI) Program in the United States, is a federal comprehensive benefit program designed to provide partial replacement income for older workers and their spouses, those whose qualifying spouse or ex-spouse is deceased, and the disabled. Under specific conditions it also supports the children of the beneficiaries.

What is a social security income statement?

A Social Security income statement is a document issued by the Social Security Administration (SSA). The purpose is to inform you about the benefits to which you will be entitled when you retire or retire early due to disability. It is important to clarify that the amount of benefits is approximate.

Your Social Security retirement benefit is based on your earnings history. Since you are still working, the information that will be needed to determine that benefit is not complete.

The SSA has a record of your earnings and taxes paid up to this point. But what you don’t know is what your future earnings will be. The estimate assumes that your earnings will continue at the same level as in the most recent year.

To answer “how to know how much I have accumulated in my social security” you should know that the amount of money you will receive when you retire depends on the amount of money you have earned in your years of work. The more money you have produced, the more you will be entitled to later (up to a certain limit that increases each year). And since your benefits are calculated based on your highest earning 35 years, a lower earnings in any other year does not result in a reduction in benefits.

If your annual earnings exceed $137,700, you are already at the maximum benefit level. That’s the maximum taxable income for calculating Social Security benefits for 2020. Higher future earnings won’t increase your benefit.

What information does a social security income statement contain?

  • Your retirement benefit at your full retirement age (usually age 67).
  • Retirement benefits if payment is delayed until age 70, that is, the highest benefit you can receive.
  • Retirement benefits if you start receiving them at age 62 (as soon as you’re eligible for retirement benefits).
  • Your disability insurance, if necessary.
  • Survivor benefits for your spouse, child, or family, in the event you die while receiving benefits.
  • The statement also shows other useful information, such as your earnings record going back to when you started working, as well as the amount of tax on the Social Security and of Medicare that you have paid from the beginning.

How can I see my Social Security income statement?

Checking how much you have accumulated in Social Security is easy. If you are 18 years of age or older, you can create an account here. You will need some identifying information, including:

  • Email address
  • Social Security number
  • Mailing address in the United States

Next, log in to the account you created and click on the “View Earnings Record” option on the main page.

When you choose to view your record, you’ll see a table showing the year of work, the amount of taxable income from the Social Security and the amount of taxable income Medicare for each year you had countable income.

There are different columns for Social Security and Medicare income because you pay Medicare taxes on the total amount of money you earn, but you pay Social Security taxes only on earnings up to the annual wage base limit. This limit changes annually, and only earnings up to the taxable limit are considered when benefits are calculated. The limit is $137,700 in 2020, and unless your income exceeds it, the income in both columns must be the same.

Why is it important to review my Social Security income statement?

You should review your income statement at least once a year to make sure your earnings have been correctly reported to the SSA.

If your employer misreported your earnings or reported them under the wrong name or social security number, you may not have received credit for everything you did. If you changed your name after you got married or divorced and didn’t report it to Social Security, you may also have an incorrect record.

In the event there is a problem, you must contact SSA to correct it, and provide documentation including tax returns, W-2s, or pay stubs. If years have passed between your income verification and you notice an error, you may no longer have these old documents and correcting your record could be more difficult.

Don’t leave your benefits unclaimed

If you don’t receive credit for the full amount of wages you earned, your Social Security benefits will be lower as a result. And if the money was taken directly from your paycheck (which is the case for most people), you will have paid taxes for benefits that you will not receive.

Most likely the Social Security be an important source of funds when you retire. You don’t want your checks to shrink because your earnings record wasn’t correct. Create your account and review your income statement today if you haven’t done so recently, to make sure you’re receiving the full amount of retirement benefits you deserve.

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