A recent study conducted by the National Institute on Retirement Security revealed that only 11% of Americans who are not yet retired are aware of the exact amount of Social Security benefits they are eligible to receive. Furthermore, 24% of individuals claim to be “not very sure” about their benefit amounts, while 22% admit to having no idea at all. This lack of knowledge is concerning considering the significant role Social Security benefits play in retirees’ financial security.
The research also highlighted that men are more likely than women to have a good understanding of their potential monthly Social Security income. With almost 68 million Americans expected to receive Social Security benefits in 2024, totaling $1.5 trillion in benefits, it is crucial for individuals to proactively educate themselves about their entitlements. The Social Security Administration offers detailed statements to help individuals of all ages assess their benefits, which can be accessed online through a “My Social Security” account.
While it may seem unnecessary for younger individuals to check their Social Security statements, financial experts argue otherwise. Understanding how cost-of-living adjustments and annual income affect Social Security benefits can provide valuable insights into retirement planning. By assessing the estimated benefits relative to current earnings, individuals can determine the extent to which Social Security will replace their pre-retirement income.
Correcting Errors
One critical reason to review Social Security benefit statements is to identify any errors in earnings history. An annual review allows individuals to ensure the accuracy of their wage history, as discrepancies can impact estimated benefits. In case of errors, individuals are advised to provide supporting documentation to the Social Security Administration to rectify inaccuracies promptly.
Security Concerns
As the Social Security Administration transitions to a more secure online system, it is essential for account holders to remain vigilant against fraud attempts. Phishing emails may direct individuals to fraudulent websites in an attempt to steal personal information. To safeguard sensitive data, individuals are advised to access the official Social Security website directly through the address bar, rather than clicking on email links. As the future of Social Security remains uncertain due to trust fund limitations, younger workers are encouraged to manage their expectations and prepare for potential benefit adjustments in the future. Despite potential changes, payroll tax contributions warrant a reasonable expectation of future benefits, affirm financial experts.