Social Obscurity
Take Social Security statements at face value and you could botch your retirement planning
By Carolyn Bigda

(MONEY Magazine) – • WHAT IT IS That statement Social Security sends you three months before your birthday estimating your future monthly retirement benefit

• WHY YOU SHOULD LOOK TWICE Harvard law professor Howell Jackson says these statements can be misleading. The projections of monthly payouts are in today's dollars, not inflation-indexed, and they assume you'll work to 62 at the same salary with no time off. If that's unlikely, go to ssa.gov/planners/calculators.htm to calculate adjustments. Also, Jackson suggests multiplying the monthly benefit by 12 (as in months) to gauge what percentage of your annual income Social Security will replace.

• ERROR ALERT Since benefits are determined by how much you pay into the system, make sure your earnings history is right by comparing it to W-2s, particularly in years you switched jobs. Mistake? Call the 800 number pronto.

• DISCLAIMER It's no secret that Social Security faces a funding crunch and may pay out less than it promises--a fact that your statement points out, in bold, just below your estimated benefit. Anyone 55 or older will likely be safe from changes. Younger workers: Take it to heart.

...Feelin' lucky: In a recent Consumer Federation of America survey, 21% of investors said that the best way to get rich is to win the lottery...

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.