As your retirement date approaches, it’s time to start being more specific in your planning. A big part of any retirement plan is Social Security. While there may be some debate about the optimal time to file and various claim strategies to optimize your finances, there is one thing you need to check, no matter when or how you claim.
You must ensure that the Social Security Administration (SSA) has correctly accounted for all of your past income.
Check your earning history
The Social Security Administration used to send statements to everyone every year. Now that Americans have increased access to the Internet, the SSA by default offers this information only online.
In order to get your income statement, you will need to create an online Social Security account at ssa.gov/myaccount. All you need is an email address, your social security number, and your mailing address.
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Once logged in, you will see an option to upload your social security statement. You can also scroll down and find a link to your full earnings record, where you can see more details about your salary, like who your employer was.
Look at the report to see if all the numbers look correct. A large flag can be a year in which your reported Social Security wages were $0. But some errors may not be so obvious.
It’s important to note that your Social Security wages and your actual wages may not match exactly. This may be because certain wages are excluded from Social Security, such as your health insurance premiums or your Health Savings Account (HSA) contributions. You may also have earned above the Social Security salary cap, which changes every year.
Hopefully, thank your lucky stars and go ahead and claim Social Security when you’re ready. If you spot a mistake, you’ll want to correct it as soon as possible.
How to correct an error
In order to correct an error on your income statement, you will need to gather evidence. This can be in the form of a tax return, a W-2, or even an old pay stub. Be sure to subtract any wages that would not be eligible for Social Security when checking your evidence against what is reported by the Social Security Administration.
Once you find evidence of an error in your income report, you should submit a request for correction through the ssa.gov website or contact the SSA and schedule an appointment at your local office. Most corrections can be made online, but you will need to contact the SSA if you are disputing self-employment wages and in certain other cases.
Once you have submitted all of your documents to the SSA, all you have to do is wait for your case to be processed and for them to update your income record. It could take months.
There is technically a delay
It’s important to note that there is technically a limit on how far back you can go to make a correction to your earnings history. According to the SSA, “An income record may be corrected at any time up to three years, three months and 15 days after the year in which wages were paid or self-employment income was derived. .”
But there are some notable exceptions to this rule. You can go back more than three years for many reasons detailed on the ssa.gov site. The main reason you might not being able to return beyond three years is if you are self-employed and have not filed your taxes by the deadline.
It’s a good idea to check your earnings report regularly. Not only will you be sure to be on time, but you’ll also be more likely to have records of your tax returns or W-2s readily available. But even if you’re nearing retirement, it’s not too late to make sure everything is okay before you file your claim for benefits.
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