6 things you need to know about your statement

6 things you need to know about your statement

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Whether you’re on retirement’s doorstep or striding toward it, there’s one financial task you should complete each year: Check your Social Security statement.

To do so, you’ll have to create or sign in to your Social Security account at www.ssa.gov/mysocialsecurity. You can then receive personalized estimates of future benefits based on your real earnings, see your latest statement and review your earnings history.

So, what are some of the most important things to know when reviewing your statement?

•  Today’s pretax dollars. Your Social Security Statement details what your estimated benefit will be at your full retirement age in today’s dollars, not future dollars. That can be confusing to people who are trying to estimate how much income they will need in retirement.

A Social Security card

Your estimate is also a before-tax amount. The actual amount you’ll receive after taxes or deductions will depend on when you file for Social Security, whether it’s before, at, or after full retirement age and how much income you earn.

You should also remember that the Social Security system pays cost-of-living adjustments (COLAs) to beneficiaries and the estimates on your statement do not include COLAs, says David Cechanowicz, a senior financial planner at REDW Stanley Financial Advisors, LLC.

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