Social Security Retirement Information: What Those Annual Statements Really Mean

When you receive your Social Security Statement you should:

1. Read it.  

You will learn about the social security program, including the status and the future of it.  You will how much money you can expect each month when you retire or if you become disabled.  You will learn how much money your family members will get if you die early.  You will find out if you will qualify for Medicare benefits at 65. 

2. Check it for errors. 

Check your statement for errors in the spelling of your name, address, date of birth and your social security number.  You also need to examine your earnings record to make sure it has been reported correctly to ensure that you will receive the correct benefits when you retire. 

3. Use it to plan for your future. 

Since your social security statement will tell you how much money you can expect to get based on the age you retire, it will help decide know how much more money you need to save, or other goals you will need to meet for a comfortable retirement.  For example, if your statement says you will receive $1,761 a month, but your current budget is $3000 a month, they your investments will need to provide another $1239 a month.  Perhaps you also can plan to lower your expenses by paying off your home, and eliminating other expenses to get your monthly budget closer to the amount you will receive.   

4. Put it somewhere safe. 

Keep your social security statement in a place where you will easily be able to find it.  You can keep a copy in your safe deposit box, or perhaps store it with your yearly income taxes. 

An Important Notice

When reading your social security report you may see a rather serious notice.  There is a disclaimer that basically says the future of social security is in danger, and they may end up paying 25% less benefits than promised. 

This is something to keep in mind when saving for your retirement. 

To help you decide how much money you should be putting toward retirement, there are numerous calculators online that you could use.  I am especially fond of the following retirement calculators that will help you determine:  

How much to save for retirement

How to tell if your current retirement savings are enough

When you should start saving for retirement

 

Can A Former Spouse Claim Your Social Security?

Q:  I divorced my wife 23 years ago. Now she wants to claim my Social Security. Can she do that, and will I get less as a result?

A:  If you were married for at least 10 years and have been divorced for more than 2, your ex may qualify for benefits based on your work record. To collect, she must be at least 62 and can't have remarried; you must be of retirement age as well. But don't worry: Your own benefits won't be reduced as a result.

Source: Money magazine, July 2008