Most of us go through life without being concerned with, or ever checking on, our Social Security records. We assume the money deducted each payday and an equal amount paid in by our employer is applied properly to this valuable retirement benefit.
Ignoring is problematic
The Social Security Administration (SSA) receives a vast amount of paperwork each year. They can and do make errors and omissions. Unfortunately, the only way these problems are caught is if YOU catch them. Waiting until retirement may be too late to correct an error made 10 to 20 years back. Common problems and their impact are:
Incorrect amounts. If the SSA does not receive a W-2 wage statement from an employer, you will not see credit for these earnings. Result: Your Social Security retirement check amount averages your life-time earnings. If you have earnings that are missing, your retirement check will be permanently lower!
Missing earnings. In addition receiving credit for earnings, you also need to work a certain number of quarters to be eligible for retirement benefits. These missing earnings reports reduce your number of working quarters. Mess up here and you may not qualify for benefits at all!
The three-year correction time limit. Per the SSA, an earnings record can be corrected at any time up to three years, three months, and 15 days after the year in which the wages were paid or the self-employment income was derived. While there are exceptions for fraud and obvious clerical errors, why risk the hassle by not finding errors and fixing them when they happen?
Action to take
Thankfully, it is now easier to confirm the accuracy of your account as the SSA has an online tool that allows you to review your historic earnings statements online at www.ssa.gov.
To use the tool, you will need to go through an online signup process that includes many safety measures to ensure your identity is protected.
If you see an error on your statement, you should immediately correct it. You can do this by contacting the SSA:
Social Security Administration Office of Earnings Operations
PO Box 33026
Baltimore, MD 21290-3026
The message? Since you are receiving a new W-2 right now, make reviewing your Social Security retirement account part of your annual tax filing experience.