High on my list of things I’m not currently concerned about is my future social security benefit. I’m usually only thinking about it as I frown while viewing my paycheck and see the FICA-social security and FICA-Medicare tax deductions or when I hear politicians angrily argue about the future of Social Security on T.V. (Yes, I’m in the camp of people that believe social security will be around for our future generations, not just the folks currently receiving it now.)
Since I don’t care about Social Security right now, why am I writing about it? Well, I was chatting with my Mom about her decision on when she wanted to take her Social Security benefits and I thought about my own Social Security benefit letters I used to receive in my twenties. After some light research I discovered the Social Security Administration (SSA) only mails Social Security Statements to workers age 60 and over who aren’t receiving Social Security Benefits yet. The Administration is trying to save some paper/$$$ and is now asking workers to register for a “my Social Security” account instead.
So, I headed over to https://www.ssa.gov/myaccount, to set up my account, but somewhere along the process, I was notified that my account was frozen and I had to call customer service to unfreeze it. My Credit Karma account later notified me of a soft inquiry from the SSA on my credit report since the SSA partners with Experian.
Once I was able to access my account, I saw that I was able to do several things:
- Saw my an estimate of my future retirement benefits
- Apply for Social Security benefits due to retirement, disability and other factors
- Check out my earnings history
- Request a new Social Security card
The thing I found most interesting was my reported earnings history, so I threw my data into Excel to be able to visualize it better. Take a look at my taxed Social Security earnings history in the chart below.
Looking at my Social Security earnings is a little bit like taking a walk down memory lane for me. My earnings history starts in 1999, that’s 17 years of earnings. Eeek. Talk about a way to make a gal feel old. I’ve officially been working for over half of my life.
In high school, I worked as a waitress, a gymnastics coach, and at Bed Bath & Beyond, seriously, ask me anything about Egyptian cotton and thread count. I worked for a small-cap boutique investment firm in college for a few years, but where my earning took a big climb was when I added a part-time hotel cocktailing gig to my schedule, go figure. Out of college, I found my dream job with a large defense company. My earnings kept increasing until I married my husband in 2010, and we PCS’ed for the first time. I lost my job due to the OCONUS PCS and then found an Army civilian position at about half the salary I was making before.
From there, the cycle pretty much goes, PCS, find a job, get a promotion, PCS, start all over. The military spouse career successful career path definitely has a large learning curve. However, with almost eight years as a military spouse under my belt, I feel like I’ve found my groove in the post-PCS job hunting world, so I’ll end my military spouse job hunting rant there.
Social Security earnings is pretty cut and dry for us civilians. Each year that you have been working, the Social Security Administration records your reported earnings. The key word here is reported. If you are doing some “money under the table” employment, your earnings are obviously not being reported to the Social Security Administration. The Social Security Administration has a formula that converts annual earnings over so many years into credits. The more you salary you earn, the more credits you earn, and that increases your Social Security benefits – to a point.
That got me thinking about when my husband was deployed and we enjoyed the benefit of not paying taxes on his salary since he was in a combat zone. Was being deployed for that year going to hurt his Social Security credits or future benefit because his combat pay was not being taxed? Short answer, no, not at all. Even when servicemembers are deployed and their combat base pay is not taxed for federal taxes, their base pay (not BAH or BAS) is still reported to the Social Security Administration and Social Security and Medicare is still taxed by the Social Security Administration. I also learned that some servicemembers do pay federal taxes on a portion of their base pay even while deployed. For all enlisted, the amount of the exclusion from federal taxes is unlimited, but for officers, the exclusion is limited to the maximum amount of enlisted pay (mostly likely O-6 and above).
Social Security earnings is not a very sexy topic, but I enjoyed getting the chance to take a walk down memory lane with my earnings history and I learned a little bit along the way. The Social Security Administration urges you to occasionally check your earnings history online to make sure that you are getting “credit” for the work you’ve done towards your future retirement benefits. However, I would assume that most people have never been in a spot where the Social Security Administration has “forgotten” to take an employee’s FICA deductions from their paychecks. Even though your earnings history is probably 100% correct, it’s still fun to take a walk down your financial memory lane.