Social Security is a significant source of income for most retirees, but many people don’t know how much they will receive from the program. A study by the National Institute on Retirement Security shows that only 11% of Americans who aren’t retired know precisely how much they will get in Social Security benefits. In 2024, about 68 million Americans will receive monthly Social Security benefits, totaling around $1.5 trillion paid annually.
Retired workers earn an average of $1,918 per month. The Social Security Administration provides detailed statements that estimate future benefits to help workers of all ages. People aged 18 and up can access these statements by creating a “My Social Security” account online.
Workers aged 60 and over who don’t use online accounts can get paper statements by mail. Workers can go to the Social Security Administration website and log into their account to receive an estimate of their future benefit amounts,” said Tyler Bond, research director at NIRS. For people aged 62 through 70, checking your Social Security statement lets you see how annual cost-of-living adjustments affect your monthly benefit.
Even younger workers can benefit from monitoring these statements. The best way to think about it is, what kind of living standard would Social Security provide if you continue to work and earn wages in line with inflation,” said Joe Elsasser, a certified financial planner and president of Covisum, a Social Security claiming software company. For example, if you currently earn around $6,000 a month, and your Social Security statement shows an estimated $2,000 monthly benefit, Social Security would replace about one-third of your pre-retirement income.
However, keep in mind that the statements are snapshots in time and may not account for future wage increases or cost-of-living adjustments. Your estimated benefit is most accurate if your earnings history spans at least 35 years, as even one additional year of higher wages can substantially impact your benefit.
estimating future Social Security income
One crucial reason to check your Social Security benefit statements is to ensure there are no errors in your earnings history. Checking your statement annually helps verify that your wage history is accurate. Mistakes can happen, and if earnings are missing or incorrect, catching these errors early makes them easier to fix.
To correct your earnings record, take your W-2 form (or Schedule SE if you’re self-employed) to your local SSA office. Other proof, such as tax returns or pay slips, can also be used. The SSA will investigate based on the facts you provide if you lack paper documentation.
As the SSA transitions to a more secure system, be vigilant of potential fraud. Some emails may try to redirect you to false links to steal personal information. Always ensure you are on a secure “.gov” website before entering any information.
Instead of clicking email links, enter “ssa.gov” directly into your browser’s address bar. There is some concern that Social Security’s trust funds are running low, prompting worries from future beneficiaries. While Congress is likely to implement changes to protect Social Security, younger workers should still expect some form of return from the program, though a benefit cut is possible.
“It’s totally reasonable to expect a benefit cut for younger people,” Elsasser said. “But to plan for it not to be there at all is a poor assumption.”
By staying informed about your estimated benefits and regularly checking your Social Security statements, you can better plan for your financial future.
