If retirement is a long way off, maximizing your Social Security benefits might not be on the top of your to-do list. But whether you're retiring in two decades or two years, there's a simple thing you need to do every year to make sure you get the checks you deserve. Here's what it is.
All future retirees need to check this number annually
Each year, everyone should check their Social Security earnings record. This can be done at mySocialSecurity. Once you've signed into your account, you will see the option to "Review Your Full Earnings Record."
After you click on this link, there's a table showing every year that you worked, as well as the amount of money that you made during that year. And there's a reason it is so crucial to check this record to make certain the amount of your earnings is correct.
That's because your future Social Security benefit is based on your average earnings, and the Social Security Administration uses your earnings record to make that calculation. When it comes time for you to retire and file for benefits, the SSA will check all of your past earnings, adjust them to account for inflation, and calculate your average monthly income based on your 35 highest earning years.
If your earnings record shows a lower salary than you actually earned was reported to the SSA, it could bring down your career-average wages, resulting in a lower retirement benefit.
And because you typically pay Social Security taxes out of each paycheck, there's a good chance that you would have paid taxes on wages you didn't get credit for if your earnings record is wrong.
Why checking your earnings record each year is so essential
You don't want to end up with a lower Social Security benefit due to an error on your earnings history, so it's smart to check your wage history each year.
That's because it can be a lot easier to correct the problem if it's discovered right away. The SSA has a form to request the correction of your record, and you need to include evidence of a mistake. If you don't discover a mistake until decades later, there's a very good chance that any evidence (like pay stubs and tax returns) will be long gone.
And if you don't regularly check your earnings record, you might not even notice any discrepancies since you likely won't remember exactly what you earned five, 10, 15, or 20 years ago.
Checking your earnings record is really simple and takes minutes. It's one of the easiest ways to get the maximum Social Security benefit. Check yours today, and put an annual review on your to-do list.