National Social Security Month is an ideal time to create or log into your my Social Security account on SSA.gov. This is where you can find your most recent Social Security statement and other benefit-related information.
Your Social Security statement is one of the most essential tools for retirement. During the COVID-19 pandemic, a significant redesign was implemented, and the new appearance is notably different. The two-page statement is a radical departure from the one-page statements you’ve received for the past two decades.
The phrase Marcia Mantell
This new statement omits or drastically reduces a substantial amount of crucial information, which is regrettable. You may search for it after logging in. It exists somewhere. But if you have no idea where to look, you’re out of luck.
Here are some advantages and disadvantages of the new statement versus its predecessors.
How Much Will Your Social Security Benefits Be?
The large banner across the top of the statement displaying your estimated benefit in colossal font is missing immediately.
How much do you receive?
Not yet known. In the previous version of the statement, the amount you are eligible to receive at full retirement age was clearly stated (FRA). This is the single most important piece of information you need to plan your Social Security retirement income.
It is your estimated benefit payment at the age of full retirement eligibility (between 66 and 67 for most). If you file for benefits before your FRA, you will receive less. Claim after FRA, and you will receive more. In either case, you must determine your “anchor” amount.
If you look closely, you can find your full retirement age buried in the top-left gray box, but there is still no dollar amount for your primary benefit.
In the graph on the right, there are nine different amounts that can be received between the ages of 62 and 70. However, nothing indicates which amount is your primary coverage (PIA). You needed to read that gray box to determine how to assemble the puzzle pieces.
In previous Social Security statement formats, three benefit estimates were provided: Your estimate at full retirement age (again, the “anchor” benefit payment), 62 years of age, and 70 years of age. While beneficial, the majority of people retire between 62 and their full retirement age, typically at age 65. If it wasn’t displayed, you would have to call Social Security or use the online tools to estimate your benefit.
This new graph achieves two objectives:
- It illustrates the significant differences in payment amounts between ages 62 and 70.
- It populates the estimated benefit amounts between the earliest claiming age (62) and the maximum claiming age (67). (70).
However, this format gives the impression that annual benefit amounts are “bumped up.” If you begin receiving benefits at age 62, you will receive $1,465 (as shown on the “Wanda Worker” sample statement). Then, when you reach age 63, your benefit appears to increase to $1,569. Continue until age 70, at which point your benefit will increase to $2,634.
That is not the case at all. Once you select your claiming date, your benefit payment is fixed permanently. Your base amount will only increase due to cost-of-living adjustments or additional earnings. The statement is simply ambiguous.
Where Have Your Past Earnings Gone?
In a shocking move, the new statement omits your complete earnings history. Given that your personal earnings are the single most important factor in calculating your benefits, it is astonishing that they are no longer listed.
Your benefit is based on your highest 35 years of earnings, adjusted for wage inflation. If you have zeroes in your employment history, they may no longer appear on your statement. Tens of millions of Americans have some zeroed-out years as a result of:
- Staying at home with the kids
- Graduate/medical/law school years
- periods of joblessness
- Working for state or local authorities
- Union membership with a pension benefit
- Leaving the workforce to care for an elderly or ill relative
- Resigning during the outbreak of COVID-19
As long as you replace the zeroes with additional years of work, they do not have to reduce your benefit amount. For those nearing retirement, you will not see any wage information for at least 30 years of employment history. Only the sixteen most recent years are displayed.
Again, the my Social Security page contains a comprehensive listing of your earnings history. But not having instant access to your entire employment history significantly reduces your decision-making information.
This is a significant error in the newly crafted statement.
Pro: Attaching a Fact Sheet Based on Age to Your Statement
There have been fact sheets with additional decision-making information for some time. However, they were not previously included in your statement downloads. Now they are joined.
The “Fact Sheet for Workers Ages 49 to 60” provides a concise overview of working during “retirement” while claiming taxes and benefits for others. There are links to more detailed information provided. Before deciding to file a claim, you will require additional information in each section.
A plus on the fact sheet: the Social Security Administration is upfront about the solvency problem. They provide an illustration of how benefits could decline if Congress fails to address the anticipated Reserve Account shortfall over the next 12 years. And, most importantly, they provide a link to current information.
Major Deficit in WEP and GPO
Millions of state and union employees who will receive a public pension instead of Social Security are misinformed about spouse benefits. While they are aware that they are “uninsured,” many believe they will be eligible for spousal or ex-spousal benefits. In most cases, they are not. Or, their survivor and spouse benefits will be diminished.
The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) were not fully explained in earlier versions of the statement. But at least two substantial paragraphs appeared significant.
This most recent assertion consists of only three sentences plus a link. Due to the layout of the page, the vast majority of people who will be subject to WEP and/or GPO will miss the topic’s sheer importance.
You can see how much you and your employers have contributed.
Many individuals do not comprehend the full value of their Social Security benefits. They believe the FICA dollars they contributed are theirs and want them returned.
As a nod to the SSA, they’ve included the specifics: how much you contributed over decades of employment and how much your employer(s) contributed.
Consider the payoff for a moment: In the case of Wanda Worker, she contributed $76,000 and her employers contributed $77,000 over approximately 40 years. With her $2,000 monthly benefit, she receives a full refund of the taxes paid on her behalf in 6.4 years. However, she is likely to live well into her 80s and 90s, and the checks continue to arrive. Even after “her money” has disappeared.
Despite the fact that the new statement addressed some issues and made some improvements, the grade remains a C+. The amount of vital information eliminated outweighs the benefits of the new layout.
Regardless of the design of the statement, the win is knowing that you will have a safety net in old age. Approximately 50 million Americans currently receive Social Security retirement benefits, with an additional 15 million receiving disability or survivor benefits. The program holds the power. There remains time to amend the statement.