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Financial Industry

Retirement Planners Get Access to Personal Social Security Data

Betterment is an initial adopter of a new government initiative to make personal earnings history and benefit projections available to all.

Articles by Alex Benke, CFP®

By Alex Benke, CFP®
VP of Advice and Investing, Betterment  |  Published: July 15, 2015

Betterment is one of the Social Security Administration’s (SSA) partners in a new initiative.

The SSA will provide individuals with an easily transferrable data file with the information contained in their monthly Social Security benefit statement.

Betterment customers can now upload this data into their personal RetireGuide plan.

One very important reason today’s retirement planners should be excited: data, data, and more data, allowing them to plan for the future with even more precision.

The Social Security Administration (SSA) recently announced that it will be providing individuals with an easily transferrable data file with the information contained in their annual Social Security benefit statement. Your personal Social Security data file includes both your earnings history and benefit projections. Betterment is one of the SSA’s partners in this new initiative.

RetireGuide, Betterment’s comprehensive online planning tool that Betterment that launched earlier this year, incorporates multiple data sources, including tax and Social Security information, to provide for better long-term investment planning.

Betterment customers can upload the SSA data into their personal RetireGuide plan. Using the information from the Social Security Administration, Betterment can provide customers with an even more accurate plan to help better prepare for retirement.

Should I upload my Social Security data file?

There are strengths and weaknesses of the SSA’s benefit estimate. The main strength is that it is based on your actual earnings history. However, it assumes that you will continue to earn your prior year salary all the way until retirement.

As a result, if you’re younger than 50, you’re probably better off using the RetireGuide’s model  estimate of Social Security benefits, which takes into account the fact that you’re likely to earn raises throughout your career. You can even control how much RetireGuide assumes, as well as your starting age, by clicking Edit Assumptions in RetireGuide.

If you’re older than 50, the Social Security estimate is likely to be a fairly accurate portrayal of your expected Social Security benefits. This is because it is based on your actual history of earnings, and real earnings growth generally levels off around age 50.

By making this data accessible to all, we hope this is a sign of a trend to “set data free,” even from governmental sources. We believe this can only help investors and we’ve been in contact with other government offices as well, pushing for further availability of data, like tax information.

The more data that is easily available for individuals to input into their personal plans, the better our calculations are for a comfortable retirement.

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