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Check Your Future Social Security Payouts With New Online Tool

Lisa Scherzer
Personal Finance Editor
The Exchange

The bedrock of retirement for many Americans has gone digital. As of May 1, eligible workers over 18 can access their Social Security statements online — and view their earnings and benefit information — by creating an account at My Social Security.

As you might recall, last year the SSA stopped mailing statements to save money, but in February it resumed mailing them to people 60 or older who hadn't started drawing Social Security benefits. Later this year, it will mail statements to workers when they turn 25. Workers have been receiving these statements annually since 1999. The SSA has said mailing paper statements has cost the agency $70 to $72 million annually over the past few years.

Registering doesn't take long (or at least didn't take long for us; others reported some complications). You'll need to provide some personal information (address, Social Security number, phone number) that matches information already on file with Social Security to verify your identity, and answer a few questions for security purposes. (Data from the credit reporting agency Experian are used for verification purposes.)

The online statement, by the way, is pretty much identical to the old mailed statement in what information it contains. But the ability to access it at any time is very handy because "the old statement was always being misplaced," says Jim Blankenship, a certified financial planner in New Berlin, Ill.

Here's what you'll see:

-The tool shows three options for your monthly benefit amount based on your current earnings rate: at full retirement age (which for us is age 67); at age 70; and at early retirement age (62). The estimates are based on your average earnings to date and assume you will earn the same annual income from now until retirement. Obviously, waiting to start drawing benefits until age 70 is the most lucrative option (our monthly check will be 82% higher if we wait until age 70 vs. starting at 62).

-The statement provides estimates for disability and survivor benefits, including how much your spouse or children will receive if you pass away.

-You also see a history of your earnings — the amount you earned every year you paid Social Security taxes. (On a side note, the earnings history made for a fun opportunity to remember the unfortunate couple of years we earned a whopping four figures trying to slap together freelance jobs.)

Since benefits are based on your 35 highest earning years, it's a good move to ensure yours have been posted accurately in Social Security's database. Note that for a relatively younger worker, whose retirement date is far off, the projected benefit amount assumes you'll continue to earn what you've earned in recent years between now and when you start drawing benefits. So it may not even be a meaningful number at this point — especially for a younger worker. And if for whatever reason you get laid off, stop working for a while or your earnings take a hit before you reach full retirement age, your benefit estimate will be higher now than the actual payout you'll receive, says Sharon Lacy, a certified financial planner at Bedrock Capital Management in Los Altos, Calif.