Paper Social Security Benefit Statements Are Early Casualty of Budget Cuts
While Americans are considering what the effect of debt ceiling negotiations might mean for entitlement programs and discretionary spending, one small but extremely important paper communication from the Social Security Administration has already been discontinued, maybe temporarily, maybe permanently, due to budget constraints.
For years, retirement planners have been telling people to pay close attention to “Your Social Security Statement,” a handy annual report on the person’s actual work history that has explained his or her projected Social Security benefits. The Statement would be mailed to the individual about three months before his or her birthday and describe what benefits she would receive if she continued working at the same rate but then retired at age 62 or at Full Retirement Age which is currently age 66. Other information is also included.
In March, for budgetary reasons and to continue the movement to on-line services, the Social Security Administration stopped mailing “Your Social Security Statement.” There was a projected estimated cost savings in fiscal 2011 of $30 million and in fiscal 2012 of $60 million mostly from postage for this mailer going out to 150 million people. Compared to the overall Agency budget, the savings are small. The intention of the Social Security Administration is to make the information eventually fully available on line, possibly in 2012 and also eventually to mail regular Statements at least to people age 60 and over and people under 60 on request.
It should be noted that the Social Security Administration in other ways has done an admirable job of making its information available on-line and everything from applications to corrections to appeals have been accessible on the Internet. Considering the general public’s need to access retirement information, though, for many, including the government’s General Accounting Office, the alternatives to the paper mailer are not good enough even in tough budgetary times.
“Your Social Security Statement” has been helpful in sorting through calculations to arrive at a reasonable estimate of what you might receive in retirement and I would highly recommend anyone who has last year’s Statement, especially anyone age 60 or over, to take it out and review it thoroughly.
First, as previously described, are the dollar amount of retirement benefits estimated at age 62, at Full Retirement Age, and at age 70 if you defer receiving benefits until age 70.
Next is the estimate on Disability Benefits concerning what you would receive if you needed to file for Social Security Disability.
Following the Disability Benefit section is information on Family and Survivor’s Benefits. Survivors’ Benefits describe what your spouse and/or minor children and, in some cases, dependent parents might receive based on your earnings record if you died. During your lifetime, other persons might recover on your earnings record such as your current or, in some cases, former spouse or minor children if you have reached the age to collect retirement benefits or you are on Social Security disability. There is a maximum overall family benefit amount.
Finally, the statement lists your income per year on their records which is what is used to calculate your benefits.
One of the concerns about the new policy is how can someone know whether the Social Security Administration has correctly calculated his benefits for the future if we cannot see the earnings records on file? Until last March that was not a problem since those who pay into Social Security could access the earnings record information in “Your Social Security Statement.” If there was an error, it could be corrected by filing a Request for Correction of Earnings Record.
For now, anyone who wants to know estimated benefits is directed to a statement at www.ssa.gov that advises “n light of the current budget situation, we have suspended issuing Social Security Statements. You may be able to estimate your retirement benefit using our online Retirement Estimator”. The Retirement Estimator is a useful tool but you have to be prepared with information and time. Also it will not give everything contained on “Your Social Security Statement.”
Hopefully, this omission is temporary. Some expenditures, like this one, are an important investment in peace of mind.
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.