The
Social Security Administration announced Tuesday that it will resume mailing estimated benefit statements to most workers every five years, while encouraging all workers to create personalized
Social Security accounts online that will allow them to access their benefit information at any time.
The
Social Security statement is a valuable
financial planning tool providing workers age 18 and older with important information regarding their earnings, tax contributions, and estimates for future retirement, disability and survivor benefits.
Beginning this month, workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 who are not receiving
Social Security benefits and who have not registered for a My
Social Security online account will receive a statement in the mail about three months before their birthday. After age 60, people will receive a statement every year. The agency expects to send nearly 48 million statements each year.
The
Social Security Administration began mailing annual estimated benefit statements to workers 25 and older in 1999. The annual paper statements became a critical
financial planning tool that provided details about future retirement income and served as a stark reminder of the need for personal savings to supplement those benefits.
But the agency stopped mailing annual benefit statements as a cost-saving measure in mid-2011. The switch from paper to digital delivery saved the government about $70 million annually in printing and postage. But the budget-cutting move proved unpopular.
“We have listened to our customers, advocates and Congress,” Acting Commissioner Carolyn Colvin said in a statement. “Renewing the mailing of the statement reinforces our commitment to provide the public with an easy, efficient way to obtain an estimate of their future
Social Security benefits.” But, she added, “I encourage everyone to create their own secure My
Social Security account.”
Personalized digital statements are identical to the old paper versions. To date, more than 14 million people have established a personalized My
Social Security account. Still, that represents only about 11% of American workers.
Anyone who is 18 or older
can sign up for a Social Security account. I encourage every financial adviser to sign up for an online account so you can help your clients in they encounter problems. Ask them to bring their latest statement to every financial review.
To create a My Social Security account, you must provide a Social Security number, mailing address and a valid e-mail address. Individuals also must be able to answer questions that only they are likely to know that matches the information on file with Social Security, as well as their credit report.
What does your credit report have to do with your Social Security statement? It's an extra step to protect your personal information.
For example, when I went through the account set-up process, I was asked questions related to the names of former employers and some of my previous addresses. These are called “out of the wallet.” That means that even if your wallet had been stolen and your data compromised, these are questions a fraudster couldn't answer.
However, if you have a security freeze, fraud alert or both on your Experian credit account — as many Americans do in the wake of numerous credit card security breaches at major retailers — you cannot create a My Social Security account online. You must first ask Experian to remove the freeze or alert. Or, you can create a personalized Social Security account without removing the security freeze or fraud alert by visiting your local Social Security office.
One of the best parts of the online Social Security accounts is you get a reminder each year to check your account to verify that all the information is accurate and up-to-date. I just received mine today.
(Questions about Social Security? Find the answers in my e-book: Maximizing Social Security Retirement Benefits.)
