3 basic facts about your social security statement

If you work and pay the social security administration will mail you the annual report. This statement contains records on the revenue you paid payroll taxes. It also assesses the pension you can get these benefits. Statement will be mailed to you approximately three months before your birthday at age 25. Alternatively, you can request that the statement will be mailed to you. The request may be submitted online, but you have to wait to get it on paper.

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Annual report of the social security contains information that is useful for people, planning for retirement. In particular it will help you answer three important questions.

1. is accurate history of your revenue? you should check the accuracy of the earnings performance history. To be eligible for social security benefits, you must have earned 40 work credit.You can earn a maximum of 4 credits in a year according to the regulations must have at least $ 4480 incomes receive a maximum of 4 credits. If you have worked on a part-time basis during the year or full day only for part of the year, it is possible that errors in reporting or writing your earnings can cost you one or more credits. A thorough examination of your application will tell you if this is so that you can take steps to correct the error.

Allowance for retirement, you will receive is based on average 35 years your high income. If your income is reported, you may lose the benefits that you otherwise would be entitled to. Your statement will tell you if this is a problem.

[See 3 ways to determine when a claim for social security]

2. Can you survive on your estimated benefits? many Americans derive most of their retirement income.They had planned it that way: your statement of welfare transfers the amount your estimated benefits (in today's dollars).Can you live on this amount? Probably not. What will you do to make up the difference?You will be responsible for the pension income you need above that amount.Face the hard truth in that statement, and do something about it – from now.

3. what it will cost you to retire early?Claiming social security retirement at an early age (62) will cost us something, than to wait until full retirement or later.Your social security statement will tell you what value is, in actual dollars, for example I know from my statement that if I retire at age 62, instead of having to wait until the age of 66, I will give up to $ 653 in income each month for the rest of my life.She also tells me that claiming early 62, instead of having to wait until age 70 will cost me $ 1490. understanding the costs every month retirement in real dollars for social security is a powerful incentive. This is especially true if you factor in the potential loss of a spouse who will depend on the living allowance.

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Your annual report is a powerful social security retirement planning resources. take advantage of his read statement and answer these three questions for yourself.

Mark Patterson is an engineer, patent attorney, and author safe baby boomer retirement system he blogs in the area of personal finance and retirement planning for tough love money and go until retirement.

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Why social security is your best investment

Traditional pension plan frequently advises on your investment market as long as you can. But take a close look at the rules of insurance makes a convincing case that you'd better monetization of 401 (k) s, when it will delay the need to start a social benefit.

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Differently looking at social security has a special meaning in these days.With interest rates close to zero bonds and other so called "safe" investment give very low yields. stock market is not a real successes over the past 10 years. And its volatility makes a risky place to pension funds.

Social security, on the other hand, has very little risk.You can start getting the benefits at age 62. but if you do, you will leave a bunch of money on the table. People nearing retirement age today, taking benefits at age 62 will pay them only 75% as much money as if they wait until they turn 65, which is their legal "full retirement age" in accordance with the rules of insurance.Every year, the benefits are delayed their payments will grow 8%.

Annually increases end if 70. Claiming social security benefits in pays, 132% from its level if people started taking benefits when they turned 66. Moreover, social security has an annual cost of living adjustment (COLA), benefits up to adjustments reflect increases in consumer prices in such a way that ensures annual increase immune to most of the effects of inflation. Rising health care costs so consistently exceeds the overall inflation that some proponents say, Cola need be sweetened.

[See social security Cola does not match inflation.]

In addition, if you take social security benefits at age 62 to 66, no outside the income you earn can reduce your payments for social security.

Durability of course is a wildcard in the decision.One who holds the benefits and then dying at a young age will not come close to the "break even" on social security.And if they cashed in retirement accounts, so they can afford to postpone the adoption of social welfare, their heirs, won't be too happy either.May refer to stocks of pension accounts in your will is not possible to pass on unused. social benefit (although the spouse can take advantage by claiming part of your benefit in the form of survivorship payments).

Increasingly, however, extended service life chances for more, not less.Use the longevity of the social security see for yourself the average man turning 65 will live another 18 years old; the average 65-year-old woman will live another 20 years and they are averages. If you don't have a family history of a health problem or a chronic illness themselves, you'll probably live longer than the average. If you are seriously overweight and getting regular exercise, you will live longer so far.

The ongoing recession, drove a record number of 62 years of age in the last year to claim social security as soon as they could. There is no way to know how many of them have made this decision, while other pension assets, salted away.

But if you come across such a choice, don't ignore call to view social security may be your most valuable resource you want to have a $ 750 per month, or $ 1000 per month for four years (up, adjusted for inflation), or $ 1320 per month when you turn 70?

[See 10 trends longevity.]

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