The Social Security Administration (SSA) is advising people to check up on their Social Security records, because those records might be wrong. If the mistakes are not corrected, you won't get the proper Social Security check when you retire.
The vast majority of records are probably correct, but at Social Security, "no problem is a small one," says SSA commissioner John Svahn. Even a one percent error affects the accounts of 1.2 million people. Because no one can expect 100 percent accuracy from any institution, it is up to you to keep an eye on things yourself.
Social Security does not keep track of the Social Security taxes you pay. That is the job of the Internal Revenue Service. SSA pays attention only to the amount of money you earn every year, and on which your future benefits will be based. You have a personal earnings statement somewhere in SSA's two-acre library of magnetic computer tape, and that is the statement you want to see.
Free request forms are available at your local Social Security office. Expect to wait three or four months for an answer.
Many people simply write to Socal Security without using the official form (the address: SSA, Box 57, Baltimore, Md. 21203). Or, they use a form provided by an insurance company, an accountant or perhaps their congressman. These requests take even longer to answer because they cannot be processed uniformly. So use the SSA form if you can.
Some companies offer to get you your Social Security records for a $10 or a $15 fee. But all they do is send in the same SSA request form that you could mail yourself. Don't be duped into paying for a service that the government provides free.
When you get your earnings statement, it will immediately look wrong. That is because Social Security does not keep track of all the money you earn. It lists only that amount of earnings on which you paid Social Security taxes, which, until recent years, was very small.
Your statement of earnings groups the years 1937-1950 and 1951-1977. If you have always earned the Social Security maximum, your records would show $42,000 worth of earnings for the first period and $188,000 for the second. You will be credited with a smaller amount, however, if you did not work every year during these periods or if you earned less than the maximum.
If you think that something is wrong with this record, you may ask to have the years broken out individually.
The most recent four years are shown separately on your earnings statement: 1978 (maximum possible earnings, $7,700); 1979 ($22,900); 1980 ($25,900) and 1981 ($29,700). If you worked for more than one employer your stated earnings might exceed the maximum, but only the maximum will count toward your Social Security check.
The official SSA request form asks only for earnings. But you can add a handwritten note asking how many quarters of coverage you have. This will tell you whether you are now eligible for Social Security benefits and, if not, how many more quarters of earnings you need. (A quarter is a three-month period.)
There are two possible reasons for mistakes in your Social Security records:
(1) Social Security may be tardy in posting earnings to your account.
Your record is derived from the amount of self-employment income you report to the IRS, and also from the W-2 forms that you send to the IRS. Due to a change in reporting methods, SSA is up to four years behind in posting earnings to some accounts. People preparing to retire should keep copies of their recent W-2s and tax returns to help SSA bring their earnings records up to date.
(2) Part of your earnings record might be lost, because of mislaid computer tapes or errors in reporting your name or Social Security number. Right now, SSA has $87.9 billion worth of earnings records whose owners cannot be identified.
If there appear to be errors in your earnings record, your local Social Security office will help you put them straight. It is a good practice to hang on to past copies of your tax returns until retirement. They might be needed to ensure that your Social Security check is the right size.