Three Reasons to Check Your Online Social Security Statements Each Year

Sample Social Security Statement GraphicIt’s been a few years since the Social Security Administration stopped mailing annual paper Social Security Statements to those aged 25-60. I know, most people didn’t know what the statement was for and either threw it away or filed it somewhere. But that shouldn’t stop you from checking your earnings record each year.  Now, the SSA provides these statement online if you are under age 60. There are good reasons to check this statement on an annual basis. Earnings that were either misreported, or not reported at all, will adversely affect your or your spouse’s social security benefits when you retire. You want to make sure your earnings are being reported properly to avoid problems later.  For example, if you discover that there were problems 10-20 years ago while you are applying for benefits, the chances of getting the issues resolved easily are going to be small.  Here are three examples of how you can run into problems.

1. Make sure earnings reported on your W-2 have been properly recorded to your social security account. We know of a case where an employee has been receiving a W-2 from their employer for 8 years with the incorrect social security number on their W-2. This means that Social Security may not have recorded her earnings at all under her social security number. It’s a good idea to check your W-2 each year to make sure your social security number is accurate.

2. If you are self-employed, be sure your earnings are being reported. We have seen examples where self-employment earnings on the taxpayer’s Schedule C were reported under the wrong social security number when a husband and wife filed a joint return. In this case, the earning may be reported under the spouse’s number.

3. Some smaller employers who try to handle the payroll on their own may inadvertently not report earnings to Social Security as is required by law. Checking your statement annually will make sure you receive credit for your wages earned.

To setup an online account at the Social Security Administration, go to www.socialsecurity.gov/myaccount and follow the instructions to register an account there.

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