A growing number of retirees rely on Social Security as their primary source of income in retirement. This is why even small mistakes in your earnings history can cause undue hardship later in life.
It's important to remember that the size of your Social Security check -- or, more specifically, your primary insurance amount -- is a function of your earnings history. In other words, it has nothing to do with how much you paid in employment taxes during your lifetime.
To determine your monthly benefits, the Social Security Administration takes an average of your 35 highest earning years, adjusts them for inflation, and then runs the figure through a three-tiered gauntlet that gives you progressively less credit for higher levels of income.
While this analysis is far from simple, it's nevertheless straightforward arithmetic. In other words, there's no room for negotiation; it is what it is.
This is the reason it's important to make sure that the SSA's record of your earnings history is accurate. As the SSA explains in the pamphlet How to Correct Your Social Security Earnings Record (emphasis added):
The amount of the Social Security benefit you or your family can receive depends on the amount of earnings shown on your record. If all of your earnings are not shown on your record, this could mean lower Social Security benefits for you or your family.
You can check this in one of two ways. First, beginning this year, the SSA will resume mailing paper statements to all future beneficiaries containing its record of your earnings history. For people between the ages of 25 and 60, the statements will be mailed every five years, at ages 25, 30, 35, 40, 45, 50, 55, and 60.
A second way to check is by creating an account on the SSA's website. This is the preferred method, and it takes only a few minutes to do. After logging in, you can view your statement, verify your earnings record, and see estimates of future benefits.
Catching errors sooner rather than later is preferable for the simple fact that correcting them is easier. To do so, you're instructed to collect proof that the figure is wrong -- this can be in the form of a W-2, tax return, pay stubs, etc. -- and then contact the SSA, which promises to "work with you to correct your record."
The point is that it's incumbent on you to ensure that you've gotten credit for your work history. Everybody makes mistakes. But even though mistakes are unavoidable, you shouldn't let them impact your retirement.
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