Social Security benefits are earned based on the taxes you pay over the course of your career. Since your hard work entitles you to this retirement income -- and since it will be an important funding source to help support you after paychecks stop -- it's crucial you get every dollar you're entitled to.
That's why it's so important to complete one simple two-minute task each and every year.
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This Social Security task must be checked off your to-do list
A crucial yet simple task you should be doing throughout your lifetime to avoid shrinking your Social Security benefit involves making sure you get credit for all of the income you earn.
See, you pay Social Security taxes on your wages, up to a certain income limit called the "wage base limit." Since that limit is $147,000 in 2022 (and is the inflation-adjusted equivalent of that amount each year), most people are taxed on their entire annual salary. Employers withhold these taxes and report your income to the Social Security Administration.
The SSA then keeps a running tally of your earnings. And when the time comes, it adjusts wages over your career to account for inflation, then gives you a standard benefit equal to a percentage of average wages in the 35 years your earnings were the highest.
The problem is, your benefits will be accurate only if your employer correctly reports all of your wages and Social Security documents them properly. And that doesn't happen in every situation since mistakes can be made. If you don't want to see a reduction in your benefits because of bad data, you should check your earnings record annually.
Here's how to check your earnings record
The good news is, checking your wage history takes two minutes or less and is very simple, so there's no excuse not to do it. All you have to do is sign into mySocialSecurity gov.
If it's your first time, you'll need to create an account by providing some basic identifying information and choosing a user name and password. If you've already signed up, you can just sign in and confirm your identity by receiving a security code via email.
After you've signed in, agree to the "Terms of Service" and you'll be taken to the main page where you can click "Review your full earnings record now." You should see a list of each work year during which you've had wages reported to the Social Security Administration as well as the wages reported for that year. Using this info, you can confirm that the correct amount of earnings was reported.
If you've never checked your earnings record, you'll want to go back as far as you can in comparing reported income to the amount you know you made. This could mean digging out old tax records and paperwork. But once you get into the habit of confirming your wages each year, you'll only need to check the most recent year.
If you do discover a mistake, taking action quickly to correct it while you still have all your documents is the best route. It will be a lot easier than doing it in a few decades when you go to retire and find out your benefit is lower than expected. That's the big reason it's worth two minutes annually to confirm that the Social Security has the right details to give you the full payments you deserve.
