Social Security has been a cornerstone of financial security for millions of Americans since its inception in 1935. Established as part of President Franklin D. Roosevelt’s New Deal, the original aim of Social Security was to provide a safety net for retired and disadvantaged workers during the Great Depression. Over time, the system has grown to address not only retirement benefits but also disability (SSDI) and survivor benefits, ensuring a broader swath of the population has essential support during times of hardship.
Historically, the Social Security Administration (SSA) began mailing annual statements to workers in 1999, providing an estimate of future benefits along with a summary of earnings. These annual statements helped individuals track their earnings and offered projections for retirement, disability, and survivor benefits. While mailed statements have been reduced in frequency (especially for younger workers), you can still access an up-to-date version online by creating a personal “my Social Security” account.
Below, we’ll look at why these statements matter, the importance of planning for disability and survivorship, and how to set up your own account with the SSA.
Why Social Security Statements Matter
- Estimates of Your Future Benefits
Your statement gives you a snapshot of potential monthly payments for retirement, disability, and survivors’ benefits. By understanding what you might receive from Social Security, you can plan how to fill any gap between this income and your living expenses through other savings or investments. - Earnings Record Verification
The statement details your recorded annual earnings. Reviewing this information helps confirm that the SSA’s records match your actual work history. Mistakes can happen, and correcting any errors sooner rather than later ensures your future benefits will be calculated accurately. - Personalized Information
The statement includes personalized tips—such as when you can start receiving partial or full retirement benefits—and how working beyond your full retirement age might affect your payments.
The Importance of Planning for SSDI, Survivorship, and Retirement
1. Social Security Disability Insurance (SSDI)
- Why It’s Important: SSDI provides monthly income to individuals who can no longer work due to a disabling condition. This benefit can help cover basic living costs, healthcare, and other necessary expenses during a time when earning potential is significantly reduced.
- What to Plan For: Understand the eligibility requirements and waiting periods for SSDI. Keep track of your work credits (how long and how much you’ve worked). Having long-term disability insurance in addition to SSDI can strengthen your financial safety net.
2. Survivorship Benefits
- Why It’s Important: In the event of your death, certain family members—such as a spouse, minor children, or elderly parents—may receive survivors’ benefits. This can be a lifeline for loved ones to cover expenses and maintain stability during a difficult time.
- What to Plan For: Make sure your family is aware of your Social Security records and potential survivor benefits. Consider additional life insurance to supplement survivors’ benefits, especially if you have young children or significant financial responsibilities.
3. Retirement Benefits
- Why It’s Important: Social Security retirement payments can form a foundational layer of income in your golden years. However, these benefits were never meant to be your only source of income. Most financial advisors suggest aiming to replace at least 70-80% of your pre-retirement earnings in total retirement income.
- What to Plan For: Supplement your benefits with personal savings (401(k), IRAs, pensions, or other investment vehicles). Plan for healthcare expenses and potential long-term care. Understand when you want (and can afford) to start receiving benefits—early, on-time, or delayed.
How to Set Up Your Own Social Security Account
- Visit the Official Website
Go to ssa.gov/myaccount. This is the secure and official portal for signing up for a personal “my Social Security” account. - Provide Personal Information
You’ll need to enter details such as your name, Social Security number, date of birth, and a valid email address. You will also answer identity-verification questions to confirm your identity. - Create a Username and Password
Pick a strong password, following the SSA’s guidelines. You may also enable two-factor authentication for added security, which is strongly recommended. - Review Your Online Statement
Once you’ve set up your account, you’ll have immediate access to your Social Security Statement, which includes an estimate of your retirement, disability, and survivor benefits. You can also check your earnings record for accuracy. - Update Your Account Information
Keep your account details current. From time to time, verify that your earnings are recorded accurately and review your estimated benefits to ensure you’re on track.
Benefits of Having a Personal Social Security Account
- Instant Access to Crucial Information: Get up-to-date estimates on retirement, disability, and survivor benefits from anywhere.
- Stay Current with Earnings: Quickly spot and correct any inaccuracies in your earnings history, which directly impacts your benefit calculations.
- Resource for Benefit Applications: When you’re ready to apply for retirement or disability benefits, having an account can streamline the process and shorten the application time.
- Security and Peace of Mind: By setting up your account, you help protect against fraudulent activity under your Social Security number, since you’ll be able to monitor your earnings and benefit information.
Conclusion
Social Security Statements are more than just yearly updates; they’re a window into your financial future and a reminder of the vital safety net Social Security provides. Beyond retirement, SSDI and survivor benefits help individuals and families navigate challenging circumstances such as disability or the loss of a loved one.
By setting up your own “my Social Security” account, you take a proactive step toward protecting yourself and your family’s future. Regularly reviewing your statement ensures accuracy in your records and helps you stay informed on potential benefits and retirement timelines. Whether you’re just starting your career or already nearing retirement, the time you invest in understanding and planning for your Social Security benefits can make a substantial difference in your long-term financial security.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal or financial advice. Always consult a qualified professional or contact the Social Security Administration directly for personalized guidance.