You may not know it, but April is National Social Security Month. Others refer to April as Financial Literacy Month. No matter what you call it, April is an opportunity to look at the complete picture of your financial wellbeing, of which Social Security definitely plays a part.
Although many depend on Social Security disability or retirement benefits for a majority of their income, Social Security benefits cannot and should not be your complete retirement plan. No matter your age, you can take steps to bolster your financial future. But the earlier you can start saving for your retirement, the more money you will be able to accrue in one or more retirement accounts, such as a 401(k) or IRA, that are separate from Social Security.
Financial literacy involves and understanding of your total debts and assets as well as the methods available to you to save money for the things in life that are important to you. That could be a college education, a car, a house, or a family, among many other things. Financial literacy also means having access to your financial information.
Social Security provides you with a Social Security Statement, which is a record of your earnings on which you have paid Social Security taxes. It also provides you a summary of the estimated benefits to which you will be entitled upon your retirement, including potential disability and survivor’s benefits.
You can review your Statement any time if you set up a my Social Security account on the Social Security Administration’s website. You should review it periodically to make sure that your wages have been recorded properly so that you can fix any mistakes earlier rather than later. Your future benefits are based on your recorded earnings, so you need to make sure the information is accurate. Your Statement will also tell you when you have enough work credits to retire and collect benefits.
Social Security’s retirement estimator provides an example of the benefits you will be entitled to if your wages remain exactly what they are today until you retire. It will also provide you with different retirement scenarios, so you can see how much your monthly retirement benefits will be if you collect them early, wait to collect until you have reached full retirement age, or wait until you turn 70 years old to collect.
Social Security’s website also allows you to check on the status of a disability claim or appeal, request a replacement Social Security card, and instantly get a benefit verification letter. There you can set up or change your direct deposit information, change your address on record, or obtain a proof of income letter.
When it is time for you to collect Social Security benefits, you will receive your monthly benefit payments via direct deposit into the bank account of your choice. If you do not have a bank account, funds will be deposited onto a prepaid debit card.