Financial experts often say that all Americans should create their own Social Security account at the Social Security Administration website. But what they almost never tell you is the single best reason to do so — and soon.
Creating what the SSA calls a “my Social Security” account lets you access your official Social Security statement, including your earnings history throughout a lifetime of working. This helps you see if there are any mistakes on your record.
And it’s important to find those errors pronto. Because if you wait too long, it could permanently reduce your retirement income.
The federal government only gives you a short period of time — officially, exactly three years, three months, and 15 days — to fix an inaccuracy.
The clock for notifying the SSA about such errors begins ticking “after the year in which the wages were paid or the self-employment income was derived,” according to the SSA. The term “year” means “calendar year” for wages, the SSA says. For self-employment income, it refers to the “taxable year.”
If you wait until after that period, the government generally has no obligation to correct your record. That could cost you dearly when your retirement finally rolls around.
Those who collect Social Security for a long time could find that such an uncorrected mistake reduces their income every month for decades.
When the final day of this notification period falls on a weekend, legal holiday or other nonwork day for federal employees, you receive until the end of the next work day to make your request.
It’s important to note that there are exceptions to the official deadline for notifying the SSA about mistakes. According to the agency, after the deadline elapses, you can still:
- “Confirm records with tax returns filed with the Internal Revenue Service.
- Correct errors due to employee omissions from processed employer reports or missing reports.
- Correct errors ‘on the face of the record’ that is, errors we can find by examining our records of processed reports.
- Include wages reported by an employer as paid to a person, but not shown in our records.”
Still, this short deadline of just over three years is arguably the single best reason to immediately create an online Social Security account.
It’s worth noting that in the past, the SSA itself has stated that less than 1% of Social Security statements have errors. However, some tax and finance experts have said errors are more common than many people think.
If you miss the deadline for notifying SSA, all hope is not necessarily lost. Experts say the SSA has granted exceptions and corrected a taxpayer’s record even after the deadline.
But why take a chance? Setting up an account is free, and monitoring your statement each year is a great way to make sure you get every dime to which you are entitled once you file for Social Security benefits.
For more on why you should set up an account, check out “7 Reasons to Set up an Online Social Security Account — Well Before You Retire.”
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