A Social Security statement provides eligible individuals with information regarding their Social Security retirement, disability and family benefits. It also provides a record of their Social Security earnings and contributions, as well as their Medicare contributions.

The Social Security Administration (SSA) began mailing benefit statements to taxpayers annually in 1995, but it stopped the practice in 2011 to reduce operating costs. However, the SSA resumed mailing periodic statements to people again in 2014, although on a less frequent schedule than before. Current plans are to mail out Social Security statements to individuals once every five years.

There is also a plan to increase the information contained in Social Security statements to make the statements more helpful for making decisions regarding retirement planning. The financial importance of Social Security to individuals approaching retirement is difficult to overstate. Social Security provides the top source of retirement financial security in the United States, as it is estimated to provide approximately half of the income for roughly 50% of retired persons. As many pension plans and other retirement plans are gradually disappearing, Social Security represents the only guaranteed income source for many people as they enter retirement. Therefore, it is increasingly important to review Social Security statements for accuracy and to be able to use the information in the statement to make financial decisions.

Social Security Retirement Income

The first part of the Social Security statement provides a statement of benefits, showing your estimated monthly benefit at full retirement age (currently 66 if you were born prior to 1960 and 67 if you were born in 1960 or later) at age 70, and at age 62, which is the earliest possible retirement age to access Social Security benefits. Basically, you receive a larger monthly benefit if you wait longer to begin claiming Social Security benefits. Benefits increase approximately 8% annually from age 62 up to age 70. The benefit you receive if you wait until age 70 to claim Social Security benefit is almost twice the benefit amount available to you at age 62.

Review your current estimated benefit level to determine the sufficiency of your current retirement plan. Determine whether Social Security alone will provide adequate income at your planned retirement age or if you will need to supplement your Social Security income – and if so, by what amount.

The projected Social Security benefits assume no change in your current salary or in Social Security laws between the time of the statement and your retirement. Take the projected benefits as a rough estimate rather than as a definitive figure.

Disability Benefits

The statement also shows the estimated benefit you would receive if you become disabled and begin receiving Social Security disability payments within a year of the statement date.

Family Benefits

The next part of the statement shows if you have worked enough to qualify for survivor's benefits. If you have, it gives an estimate of what your dependent children and the spouse who provides for those children will receive in monthly Social Security benefits if you die.

Record of Earnings

The statement also includes a year-by-year record of earnings. Your 35 highest-earning years are used to calculate your Social Security benefits. Check this section of the statement for accuracy to ensure that you receive full credit for your earnings. If, for example, the statement shows earnings of $35,000 for a year when you actually earned (and paid Social Security and Medicare taxes on) $50,000, contact the SSA to get the earnings record collected so you will receive the proper maximum amount of benefits that you are eligible to receive.

Social Security and Medicare Taxes

The final information contained in the statement is a year-by-year record of your payments to Social Security and Medicare taxes. Check this for accuracy so you receive full credit for all contributions you have made during your working years. The Social Security statement also indicates if you have contributed sufficiently to qualify for Medicare at age 65.