3 Reasons You Should View Your Online Social Security Statement Before You Retire

Nearly 39% of Americans say that they don't have any money saved for retirement, according to Social Security Administration (SSA) data. With so many retired Americans leaning heavily on Social Security, it's easy to assume that most of us should know how much we'll receive in benefits when we retire. But many Americans don't even know what their full retirement age is, and they're often confused about how their benefits are calculated.

The good news is that it's not hard to find out what your estimated monthly benefits will be when you retire -- all you need to do is sign up for an online account at the official SSA website. Creating a "my Social Security" account will give you access to your personal earnings history, your estimated monthly benefits, and other valuable info you need to know.

Taking a look at this information well before you retire could help you make some crucial financial decisions. Here's why you should create an account as soon as possible.

1. You can verify your earnings history

It's easy to think that viewing your Social Security statement online is something that only soon-to-be retirees need to do. But there's an important reason to log in and keep tabs on your Social Security statement right now: Your monthly benefits depend on how accurate your earnings history is.

The government calculates your monthly Social Security benefit amount by averaging the inflation-adjusted salaries from your 35 highest-earning years. If for some reason the SSA has reported your earnings incorrectly during some of those years, then your monthly benefits could end up lower than they should be.

That's why the SSA recommends that you review your earnings record online, and cross-check the figures on its site with your own tax records to make sure that they match. If you find a discrepancy, you can use the SSA website to contact the agency and correct the error, to ensure you get every dime you deserve.

2. You can view your personal estimated monthly benefits amount

Social Security benefits should be only one source of your income during retirement, but the latest data shows that 62% of beneficiaries rely on Social Security for at least half of their retirement income. If you view your potential benefits before you retire, it can get you thinking about how much you need to be saving in your other retirement accounts.

U.S. retirees received an average of $1,404 a month in Social Security benefits in 2017, which -- when factoring in potential expenses -- isn't a lot of money. The relatively low benefit amount means that you're likely to need other sources of retirement income. Viewing your potential benefits years before retirement will help you decide how much more to put away in additional retirement accounts, so you can retire comfortably.

You'll also be able to see how much more you'll receive if you wait until your full retirement age, as opposed to taking your benefits early. Keep in mind that the monthly figures you'll see on the SSA's site aren't set in stone, particularly if you're young. If you have many more years to work -- and will likely be earning more in those upcoming years than you did in the past -- then your monthly benefits estimate will probably go up.

3. It will help you keep track of potential benefit changes

If you've still got a lot of working years left before you retire, keeping up with your online Social Security statement is even more important. You may have already heard that some Social Security reserves will dry up around 2034, and the proposed fixes to the shortfall could include making changes to the way your future benefits are calculated.

Significant changes may not be made for a while, but if you're planning on retiring in the next few decades, it's worth keeping in mind that the government has considered altering its benefits calculation to include the 38 highest-earning years of your inflation-adjusted earnings, instead of the top 35. Adding a few extra years into the average could decrease your monthly benefits amount and help the government make up for the looming Social Security deficit.

The government has also entertained the idea of raising the full retirement age by several years, which means you'd have to work longer before receiving full benefits.

The more you know about your benefits, the more you'll understand how future Social Security rule changes could impact them. If you're near retirement, you'll want to review a few rule changes that were made to the program this year. If you have work years ahead of you, just remember that now is the time to start tracking your benefits and planning accordingly.

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