The New Commonsense Guide to Your 401(k): Rebuilding Your Portfolio From The Bottom up

Chapter 8. Check Earnings and Benefits

DON'T DESPAIR OVER Social Security; don't get bogged down in anxiety about retirement benefits, earnings, savings, or other shortfalls. Use your energy to keep moving ahead. You will get something from Social Security, but it's not clear what it will be. Social Security is unlikely to disappear. But the crystal ball is cloudy on how benefits might change.

Smart financial planning requires that you stay on course and read all the road signs. Many people believed they were on target for a comfortable retirement until the global markets collapsed in the fall of 2008 and investors lost 30 percent, 40 percent, 50 percent, and more of their savings. Some investors who gave their money to Bernard Madoff and his Ponzi scheme lost everything. But anxiety will not help. Try to stay on course and be flexible.

Even if Social Security benefits do shrink before you retire—or especially if they shrink—you want to be certain that you get what you've earned from the system. To do that, check on your recorded earnings and expected benefits. The Social Security Administration mails annual statements to workers and former workers age twenty-five and over.

Social Security benefits are based on your lifetime earnings. If your earnings get reported inaccurately to Social Security or if the Social Security Administration records them inaccurately, it could affect your benefits. The Social Security Administration is not required to correct any error in an earnings statement ...