Q & A
Understanding your annual benefits statement
Question: How do I interpret the information presented in the annual benefits statement I receive from th Social Security Administration?
Answer: The Social Security Administration will be mailing annual benefit statements for the first time in three years to some American workers. That’s good news, because the statements provide a useful projection of what you can expect to receive in benefits at various retirement ages, if you become widowed or suffer a disability that prevents you from working.
But if you do receive a statement next month, it is important to know how to interpret the benefit projections. They are likely somewhat smaller than the dollar amount you will receive when you actually claim benefits, because they are expressed in today’s dollars – before adjustment for inflation.
That is a good way to help future retirees understand their Social Security benefits in the context of today’s economy – both in terms of purchasing power, and how it compares with current take-home pay. This approach also keeps Social Security out of the business of forecasting future inflation scenarios in the statement that might – or might not – pan out. The statement also provides a starting point for workers to consider the impact of delayed filing. Read more…
Source: retirementrevised.com, 8/23/2014
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