I have prepared a lesson plan -- a "Social Security Lesson Plan" -- for people who are thinking about retirement. So, sharpen your pencil and get out a sheet of paper and we'll begin.
The course objective is to help you prepare for a smooth transition from Social Security taxpayer to Social Security beneficiary.
I. Check your Social Security Statement. About three months before your birthday, you should receive an annual statement from Social Security. The statement provides you with your earnings history, as well as estimates of the Social Security retirement benefit you could receive based on those earnings.
If you've been doing your homework and checking your statement every year for the past several years, you will know that your Social Security benefit is not enough to live on. It never was meant to be. A good student of financial planning should make plans to supplement his Social Security benefit with a pension, savings and other investments. It's never too early to prepare for your retirement.
2. Use our online calculators if you need a revised benefit estimate. The estimates we provide in the statement assume you are going to keep working until age 62 and making about the same salary as you have in recent years (with a slight inflation adjustment). But many people plan on working longer, or know that their salary will substantially change as they progress in their career. If this sounds like you, you will want to fine tune your Social Security benefit estimate by using the benefit calculators at our Web site. Go to www.socialsecurity.gov/planners/calculators.htm.
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Pick from one of three calculators that allow you to get as precise an estimate as you want. Simply enter retirement dates and earnings scenarios to match your retirement plans. The calculators also can help you decide if you're better off taking your Social Security at 62, waiting until your "full retirement age," delaying until age 70 or any age in between.
3. Learn more about all Social Security benefits. There is a chance that you may be due benefits on a spouse's Social Security record or that your spouse may be due benefits on your record. To get an overview of all the benefits payable under Social Security, read our booklet, Social Security -- Understanding The Benefits. You can get a copy online at www.socialsecurity.gov/pubs/10024.html, or you can get a free copy by calling 1-800-772-1213 (TTY: 1-800-325-0778).
4. Get all your documents together. Whenever you choose to retire, you are going to have to file an application with Social Security. As part of that process, you are required to provide us with certain documents. All retirees must give us evidence of their age. For most people, that means a birth certificate or a religious record of your birth recorded shortly after you were born. If you don't have one, contact the bureau of vital statistics in the area where you were born, or the church where you were baptized, to get one. You generally will receive a certified copy of your birth or baptismal certificate. That is a copy that usually has some kind of stamp, seal and signature of the record's custodian certifying that the document is official. That's the birth record we need. We don't keep it. We'll make our own copy and return it to you. If a birth record was never recorded for you, or if you were not baptized as a small child, call us at 1-800-772-1213, and we can go over a list of other acceptable evidence of age. Also, to ensure recent earnings are included in the benefit calculation, we usually will need to see your W-2 form or self-employment tax return for the most recent year. In other words, if you apply for Social Security in 2003, we will want to see your 2002 W-2 form or 2002 tax return.
5. Think online when you do apply for benefits. The easiest way to actually apply for Social Security benefits is at www.socialsecurity.gov. At the home page, just click on "Apply for retirement benefits online." If you prefer, you also can apply for Social Security benefits via the phone or in person at any Social Security office. To make an appointment to do either, call us at 1-800-772-1213.
Gerald Nelson is the Social Security district manager in Austin.
