If you’re thinking about retirement, you should check your Social Security benefits. One ingredient in every financial plan I do for clients is to run a Social Security maximization analysis to evaluate options. Making the correct choice can mean tens of thousands of dollars in additional benefits to my family.
To begin this process, I encourage clients to go to the Social Security administration website and open an account at ‘my Social Security’. This account shows your actual earnings history and an estimate of your benefits at full retirement age. We use the Social Security Administration estimate of Primary Insurance Amount at full retirement age as a key data point in our Social Security analysis.
If you are younger than 60, you might think you are not interested and don’t need to sign up for a “my Social Security” account. But thanks to internet hackers, it might be a good idea for anybody with a work history to set up a “my Social Security” account before somebody else does. If you set up your account and check it regularly, you are less likely to be the victim of a hack.
If you are at least full retirement age but have not started to receive benefits, you are at special risk for hacking for a couple reasons. First, hackers have more access to information due to the Equifax breach of 2017. Second, if you have reached full retirement age and have not yet applied for benefits, a hacker can apply fraudulently in your name and receive up to six months of retroactive benefits in a lump sum, so it’s a tempting target.
If you are worried about online security, relax. The “my Social Security” account website is pretty secure. It requires a user name and strong password that must be changed every six months. Each login requires a unique code sent by text or email. For an extra layer of protection people can set it up to require answers to financial or identity verification questions. If you are worried about unauthorized people accessing your Social Security benefit, setting up an account is the best way to prevent it.
Once the account is set up, you can access your latest Social Security statement on demand. This is important for anyone under age 60 who will not receive a statement in the mail, or for anyone over 60 who may have misplaced their paper statement.
If you are working, you should check your earnings record each year. Employers usually report by March or so. Clients who are currently receiving benefits can see the record of payments and the breakdown of each payment, including gross amount and deductions for Medicare premiums and taxes. They can download a benefit verification letter, which serves as proof to lenders or anyone else requiring evidence of income that they are receiving Social Security benefits in the amount shown on the letter.
A new feature I just discovered is that “my Social Security” shows your new Medicare number. As you may know, new Medicare cards are in the process of being mailed. These cards will have a unique Medicare number to replace the Social Security number that appears on the old cards. Many of my clients haven’t received a new card yet, but thanks to a “my Social Security” account, they have their new numbers.
If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their financial plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.
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