Personal Finance
How to get your Social Security benefit estimate
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For most retirees, Social Security benefits is a major source of income.
Yet, just 11% of Americans who aren’t retired say they know exactly how much benefits they stand to receive, according to new research from the National Institute on Retirement Security.
At the same time, 24% are “not very sure” of their benefit amounts and 22% say they have no idea, according to the research, which is based on an October survey of more than 1,200 individuals ages 25 and up.
Men are more likely than women to say they have an exact or very good idea of the amount of monthly Social Security income they may eventually receive, NIRS found.
In 2024, almost 68 million Americans will receive a per month Social Security benefit, totaling about $1.5 trillion in benefits paid during the year. Retired workers receive an average of $1,918 per month.
However, experts say it’s important to know you do not have to be retired or near retirement to start gauging how much income in Social Security benefits you may be set to receive.
How to get your Social Security benefit estimate
To help workers of all ages gauge their benefits, the Social Security Administration provides detailed statements.
Individuals ages 18 and up can check their records online by creating a “My Social Security” account, according to the agency. Workers ages 60 and over who do not have online accounts can still expect paper statements in the mail. Everyone can request paper statements.
“Workers can go to the Social Security Administration website and log into their own account and receive an estimate of their future benefit amounts,” said Tyler Bond, research director at NIRS, during a Tuesday presentation of the firm’s research.
“Most workers seem not to have done that and don’t seem to have a good sense of what they will get personally from Social Security,” Bond said.
What your online statements will tell you
For individuals ages 62 through 70, the big reason to check your Social Security statement is to see how the annual cost-of-living adjustments affect your monthly benefit checks, according to Joe Elsasser, a certified financial planner and president of Covisum, a Social Security claiming software company.
But for workers who are younger, it’s still valuable to check statements.
“The best way to think about it is, what kind of living standard would Social Security provide if you continue to work, continue to basically get wages that are in line with inflation,” Elsasser said. “That’s what the Social Security statement tells you.”
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It can also help to get an idea of how much of your income may be replaced by Social Security in retirement.
For example, if you’re currently earning around $6,000 a month, and your Social Security statement shows an estimated $2,000 monthly benefit, about one-third of your pre-retirement income may be replaced by Social Security benefits, Elsasser said.
However, it’s important to keep in mind the statements are just a snapshot in time, as they don’t project wage increases or future cost-of-living adjustments.
If your earnings history falls short of 35 years, the estimated benefit may fluctuate, because even one additional year of higher wages can have a substantial impact, Elsasser said.
“The closer someone is to age 62, the more accurate it is,” said Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator.
What to watch out for
One important reason to check Social Security benefit statements is to make sure there are not any errors in your earnings history.
It’s a good idea to check your Social Security statement annually to double check your wage history as it is updated, Blair said.
The records are correct most of the time, though mistakes can happen, he said.
“If you see earnings are missing or they’re not posted correctly, you can get that fixed,” Blair said. “And the earlier you catch it, the easier it is to fix it.”
To have your earnings record corrected, you can take your W-2 form (or Schedule SE if you’re self-employed), to your local Social Security Administration office, Blair said. (To schedule an appointment or get help by phone, call 1-800-772-1213.)
Other forms of proof can also be used to verify earnings, according to the SSA, including tax returns, wage stubs, pay slips, personal wage records or other documents. The agency will also investigate based on facts you remember if you do not have paper proof.
As the Social Security Administration asks online account holders to update their online accounts amid a transition to a more secure system, account holders should also watch out for fraud, Elsasser said.
Emails may try to redirect unsuspecting individuals to false links that are not affiliated with the SSA to try to steal their personal information, he said.
Before entering any information, make sure the link is a secure “.gov” website, Elsasser said. More important, rather than clicking on email links, opt instead to enter “SocialSecurity.gov” or “SSA.gov” in the search address bar.
To be sure, as Social Security’s trust funds run low, would-be beneficiaries may worry they may not receive benefits once they retire. Ultimately, Congress will likely implement changes to protect Social Security. Nevertheless, younger workers who are paying into the program through payroll taxes should still expect some return, Elsasser said.
“It’s totally reasonable to expect a benefit cut for younger people,” Elsasser said. “But to plan for it not to be there at all is a poor assumption.”
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The U.S. job market has undergone a dramatic transformation in recent years, from one characterized by record levels of employee turnover to one in which there is little churn.
In short, the “great resignation” of 2021 and 2022 has morphed into what some labor economists call the “great stay,” a job market with low levels of hiring, quits and layoffs.
“The turbulence of the pandemic-era labor market is increasingly in the rearview mirror,” said Julia Pollak, chief economist at ZipRecruiter.
How the job market has changed
Employers clamored to hire as the U.S. economy reopened from its Covid-fueled lull. Job openings rose to historic levels, unemployment fell to its lowest point since the late 1960s and wages grew at their fastest pace in decades as businesses competed for talent.
More than 50 million workers quit their jobs in 2022, breaking a record set just the year prior, attracted by better and ample job opportunities elsewhere.
The labor market has gradually cooled, however.
The quits rate is “below what it was prior to the start of the pandemic, after reaching a feverish peak in 2022,” said Allison Shrivastava, an economist at job site Indeed.
Hiring has slowed to its lowest rate since 2013, excluding the early days of the pandemic. Yet, layoffs are still low by historical standards.
This dynamic — more people stay in their jobs amid low layoffs and unemployment — “point to employers holding on to their workforce along with more employees staying in their current jobs,” Shrivastava said.
Big causes for the great stay
Employer “scarring” is a primary driver of the so-called great stay, ZipRecruiter’s Pollak said.
Businesses are loath to lay off workers now after struggling to hire and retain workers just a few years ago.
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But job openings have declined, reducing the number of quits, which is a barometer of worker confidence in being able to find a new gig. This dynamic is largely due to another factor: the U.S. Federal Reserve’s campaign between early 2022 and mid-2023 to raise interest rates to tame high inflation, Pollak said.
It became more expensive to borrow, leading businesses to pull back on expansion and new ventures, and in turn, reduce hiring, she said. The Fed started cutting interest rates in September, but signaled after its latest rate cut on Wednesday that it would move slower to reduce rates than previously forecast.
Overall, dynamics suggest a “stabilizing labor market, though one still shaped by the lessons of recent shocks,” said Indeed’s Shrivastava.
The great stay means Americans with a job have “unprecedented job security,” Pollak said.
But those looking for a job — including new college graduates and workers dissatisfied with their current role — will likely have a tough time finding a gig, Pollak said. She recommends they widen their search and perhaps try to learn new skills.
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