Why You Must Sign Up for a Social Security Account Now

Welcome to our “Social Security Q&A” series. You ask a question about Social Security, and a guest expert answers it.

You can learn how to ask a question of your own below. And if you would like a personalized report detailing your optimal Social Security claiming strategy, click here. Check it out: It could result in receiving thousands of dollars more in benefits over your lifetime!

Today, we have something a little different: A roundup of the reasons you need to sign up for an online Social Security account right now.

Sign up, learn more about your future benefit

Do you want to know what your future Social Security retirement benefits will be? You need to open an account at the Social Security Administration’s website.

For decades, Social Security sent an annual Social Security statement to everyone who was paying or previously had paid Social Security taxes. However, in 2011, the Social Security Administration — in an effort to save money — stopped sending out these statements to everyone. Today, the statements are only sent to people who are:

• 60 or older
• Not receiving benefits
• Not signed up for an account at the SSA website

Social Security statements still provide important information about the history of your Social Security earnings, taxes paid and the benefits that you would receive if you claim at full retirement age. But the statement is not as comprehensive as it was in the past, so you should sign up for an account even if you are over 60 and are not receiving benefits.

Both the Social Security statement and the online account provide information on family survivor benefits and disability benefits. The Social Security statement calculates what your benefits would be if claimed at full retirement age, but only an online account will describe your expected benefits if claimed at ages 62 and 70.

Signing up for an account also takes advantage of the flexibility that did not exist with a paper statement. Your future benefits depend not only on your past earnings, but also on your future earnings. In doing their calculations of your benefits, the Social Security Administration previously had to make an assumption about your future earnings. The assumption that they made is that you are going to continue making approximately your present salary.

With an online account, you can enter your own estimate of future earnings. Indeed, if you want to test what your benefits will be under different earnings scenarios, you can do this as well. This should provide you with a more accurate picture of what your future benefits will be. This might be particularly important if you want to see the impact on your benefits if you retire early.

Estimating spousal benefits

Another important feature of an online account is the ability to see what spousal benefits you might receive. Social Security statements do not mention spousal benefits, but spousal benefits can be an important part of the overall benefits that a couple may receive.

Getting an estimate of these benefits requires taking information from the online accounts of both you and your spouse. You can learn how to do so at this SSA webpage.

While an online account can provide important information about how large your benefits will be when claimed at a given age, it does not tell you what the optimal claiming strategy will be. To find the optimal claiming strategy, it is useful to use a program like Social Security Choices.

An online account provides important information that you need to input into this program, so you should go there first. Then, go to Social Security Choices to find your optimal strategy. With a more accurate calculation of your future benefits from your online account, Social Security Choices can provide you with a more accurate strategy to maximize future Social Security benefits.

Got a question you’d like answered?

You can submit a question for the “Social Security Q&A” series for free. Just hit “reply” to the Money Talks News newsletter and email your question. (If you don’t already receive the newsletter, you can sign up for free, too: Click here, and the sign-up box will pop up.)

You also can find all past answers from this series on the “Social Security Q&A” webpage.

About me

I hold a doctorate in economics from the University of Pennsylvania and taught economics at the University of Delaware for many years. Presently, I am teaching at Gallaudet University.

In 2009, I co-founded SocialSecurityChoices.com, an internet company that provides advice on Social Security claiming decisions. You can learn more about that by clicking here.

Disclaimer: We strive to provide accurate information with regard to the subject matter covered. It is offered with the understanding that we are not offering legal, accounting, investment or other professional advice or services, and that the SSA alone makes all final determinations on your eligibility for benefits and the benefit amounts. Our advice on claiming strategies does not comprise a comprehensive financial plan. You should consult with your financial adviser regarding your individual situation.