When we think about ringing in a new year, our minds tend to focus on resolutions -- financial, dietary, and otherwise. It's pretty rare, however, to think about Social Security amid the holiday bustle. But actually, now's a good time to make a few key Social Security moves -- before the clock runs out on 2017. Here are a few to start with.
1. Fight for a raise
We all want to earn more money, and with year-end performance reviews right around the corner, it's the perfect time to formulate your raise negotiation strategy. What does getting a raise have to do with Social Security? It's simple. Your benefits are calculated based on the amount you earned during your 35 highest working years. If you don't get a raise this year, and it's included in your top 35 working years, you'll end up with a lower Social Security payout eventually.
Also, keep in mind that your current wages can impact your future earnings. For example, if you're earning $52,000 a year at present and apply for a new job, you'll likely be asked to disclose your income so that your prospective employer can arrive at an offer based on that number. You might, in that case, get offered a salary of $54,000, or $55,000. But if you're earning $52,000 and snag a 5% performance-based raise that brings that number up to $54,600, you'll have a higher starting point to work with for your next job. And that, in turn, will impact your Social Security benefits positively.
2. Check your earnings statement for accuracy
Your Social Security statement contains key information about your work history, including your earnings. Many folks don't pay attention to these statements, or don't even go to the trouble of accessing them. But if yours contains an error and you don't report it to the Social Security Administration, you could wind up with a lower benefit amount in retirement.
Imagine, for instance, that you earned $54,000 in 2014, only somehow that number shows up as $45,000 on your statement. If you fail to fix that error, that lower amount will get factored into your benefits calculation, which means you'll lose out on some money in retirement. To access your Social Security statement online, simply log in or create an account. Keep in mind that if you're under 60, you'll no longer get a statement in the mail, so you'll need to be proactive in obtaining that data.
3. Create an electronic file of all Social Security documents you've received to date
It's always a good idea to scan important documents and store them electronically so they don't wind up getting lost. But if you're sitting on a pile of old Social Security paperwork, it's especially critical that you take steps to keep that data safe. That's because the Equifax breach that occurred earlier this year exposed countless Social Security numbers to crooks, and no matter your age, you're at risk of having your identity stolen.
So what happens if someone does try to steal your Social Security benefits? For one thing, the burden will be on you to prove to the Social Security Administration that you are who you say you are, so the more key documents you have on hand, the stronger a case you'll build. Furthermore, if you're already collecting benefits, pay attention to when they hit your account so that if payments go missing in the future, you'll know to act immediately.
4. Read up on how the program works
Many workers are familiar with Social Security in theory, but they don't really understand how it works in practice. That's why it's a good idea to get educated about Social Security, whether you're years away from collecting benefits or are about to file in the coming weeks. As part of your resolution to start 2018 off on the right financial foot, read up on Social Security and do your best to understand its many confusing yet important terms. This way, you'll be better positioned to maximize your benefits going forward.
Before 2017 comes to a close, take the time to perform your own personal Social Security checkup. It's one of the best things you can do for yourself going into the new year.
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