Have you checked this vital social security document this year?
Your Social Security benefits are based on the average wages earned over the 35 years of your career when your earnings were highest (after each year’s wages are adjusted for inflation).
Since your benefits are a percentage of your average salary, it is essential that this salary is calculated correctly. And that’s why everyone should check their Social Security income record every year.
What is your Social Security income record?
Each year, the Social Security Administration receives a report showing how much you have earned. The SSA compiles all of this data in your income record. The recording displays:
- The year you worked
- The amount of your income on which you paid social security contributions
- The amount of your income on which you paid Medicare tax
The amount you paid Social Security tax on should generally match the total amount you earned during the year. But this is not always the case if you are making a lot of money. There is a “base salary” limit, and income earned over it each year is not taxed for Social Security purposes and does not appear on your income statement. In 2022, the basic salary limit is $ 147,000, so if you earn more, only $ 147,000 will appear on your income statement.
Taxable income for Medicare, on the other hand, will show the total amount you earned during the year because you pay Medicare taxes on all the money you earn with no base salary limit.
How to check your Social Security income statement?
Checking the registration of your income in Social Security Administration records is actually very simple.
You can do this online by creating an account at mySocialSecurity.gov. Creating an account is free, even if you must be at least 18 years old; have a valid Social Security number and US mailing address; and be able to provide an email address. You will also need to answer some identity verification questions so that you can prove that you really are who you say you are.
If you already have an account, you can log in with the username and password you created when you opened it. A security code will be sent to the email address you have on file, which you will need to enter. And you’ll need to agree to the terms of service, including not sharing your account credentials with others.
Once you have logged in, on the main page of the website, you will see the option “Review all of your income now”. If you click on it, you will see a list detailing each year of work and the amount you have earned.
Why is it important to check it every year?
The annual check of your Social Security income record is crucial. This is because if your wages are underreported, you will not get credit for the full amount you earned and paid taxes on. This error will reduce the average career salary that the Social Security Administration uses when calculating retirement benefits.
If you wait too long to verify your account, you might not remember what you won, so you won’t be able to spot errors as easily. And if you to do find an error, you may no longer have the necessary documentation to prove it and correct the file.
You can’t afford to lose credit for the income you paid Social Security taxes on and end up with a lesser benefit because of it. It only takes a few minutes to log into your account each year and check your income history, so put this task on your calendar as an annual must-have.