Your Social Security Benefits

BOSTON (CBS) - The Social Security Administration (SSA) has begun again to mail out benefit statements at five year intervals to workers who have not signed up to view their statements online. The statements will be sent to workers at ages 25, 30, 35, etc.

The annual statement includes an estimate of monthly benefits at various claiming ages, and for disability claims. It explains how benefits are calculated and displays the worker's history of income subject to Social Security tax.

You can easily create an account at the Social Security's website and check your benefits whenever you want to.

Hang on to those W-2s you receive from your employer. That W-2 may be the only proof you have of former employment. The Social Security Administration records your earnings information on an annual basis. It receives the information from your employer in order to credit your account. If your name or number is incorrect, someone else may be credited with your earnings.

If there are errors, correct them as soon as possible with Social Security. As long as you have proof of your earnings they will make the correction, no matter how far in the past the error occurred.

Now to receive Social Security benefits you must work and pay taxes into the system. An exception would be an at-home spouse or a child of a worker who could collect benefits as a dependent or a survivor.

You earn Social Security "credits" that count toward eligibility for your future benefits. You can earn a maximum of four credits each year. This year you need to earn $1,260 for each credit. The amount of money needed to earn one credit increases every year.

Most individuals need 40 credits (10 years of work) to qualify for retirement benefits. Younger workers need fewer credits to be eligible for disability benefits or for their family members to be eligible for survivor benefits if they should die.

During your working lifetime, you hopefully will earn more credits than you need for eligibility. The extra income you earn will increase your final benefit because the more you earn and the longer you work, the larger your benefit will be because of the way the benefit formula is set up.

Social Security uses the best 35 years of your working career in its benefits formula.

This year your employer and you will each contribute 6.2% of your gross salary, up to $118,500. Self-employed individuals will pay 12.4% of their taxable income into Social Security (again, up to the annual limit). Self-employed individuals are allowed a deduction for half of the tax. The limit on the taxable income goes up every year.

One more thing: You can apply for benefits online or do it in person at a SSA office near you. Call 800-772-1213 to set up an appointment.