Want to Make Smart Retirement Choices? Check Your Social Security Statement

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Have you embraced paperless billing? Have you opted out of mailed statements, choosing instead to access your accounts online only?

Your file cabinet probably feels a lot lighter. But skipping this one paper statement could put your retirement plans at risk — and it’s not even your fault you’re not receiving it in the mail.

Getting a paper Social Security benefits statement by mail can encourage workers to delay claiming their benefits, according to a new report by researchers at the Social Security Administration and the University of Connecticut.

The Social Security Administration began mailing benefit statements to select workers in 1995. Starting in 2000, these mailings arrived like clockwork for workers ages 25 and up.

CNNMoney reported a dip in mailing volume in 2011, but the SSA soon restarted mailing annual statements to workers age 60 and up. In 2014, the SSA again began sending statements every five years to most workers age 25 and up.

In January 2017, the SSA announced it would save $11.3 million by reducing those mailings to people ages 60 and older.

Why You Might Want a Reminder of Your Social Security Contributions

Your mailed benefits statement spells out how much you’d get each month from Social Security if you stopped working and started collecting payments at age 62 and compares that to your benefits if you delayed retirement until 67 or 70.

The statements also explain how much you’d get each month if you became disabled, along with the benefit your family members would receive if you died.

The mailed statements also include an earnings record so you can see how your Social Security and Medicare earnings have grown since you started paying in — perhaps since you first started working decades prior.

“Preliminary estimates suggest that receipt of the Statement significantly reduces claiming [Social Security benefits] at earlier ages and increases it at older ages,” Barbara A. Smith, senior economist for the Social Security Administration’s Office of Retirement Policy, noted in a presentation about her research. “The effect varies across gender and race and earnings levels. Receipt of the Statement is also related to delayed labor force withdrawal.”

Smith and co-author Kenneth A. Couch noted that the ease of accessing the information found in the mailed statement can benefit the labor force (you and me) by addressing concerns about retirement security, encouraging workers to delay benefits and motivating healthy older workers to stay employed longer.

You can start claiming your Social Security benefits at age 62, but delaying retirement offers larger checks to support growing lifespans. If you can delay your retirement until you’re closer to age 70, in theory, you’ll have a more comfortable retirement.

Social Security: To the Cloud!

It’s not as sexy as signing up for pizza coupons or the latest subscription box, but now might be a good time to visit the Social Security Administration online to set up a My Social Security account.

This free account allows you to access the information you would have gotten in your mailed benefits statement. And instead of waiting for the mail, you can check your account any time.

Personal finance rockstar Suze Orman even makes a video appearance to encourage My Social Security sign-ups.

“Social Security uses your highest 35 years of earnings to calculate your benefit,” she lectures through the screen. “That’s why you should check your earnings every year to verify that Social Security has your correct earnings history.”

Go ahead, put it on your to-do list. I’ll wait.

Your Turn: Can you remember when you last received a Social Security statement by mail?

Lisa Rowan is a writer and producer at The Penny Hoarder.

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