Tuesday, April 19, 2011

No More Social Security Statements

The Social Security Administration (SSA) has suspended issuing Social Security Statements--those annual summaries of your earnings history that arrive in the mail and tell you how much you can expect to receive from Social Security in retirement. "In light of the current budget situation, we have suspended issuing Social Security Statements," the SSA reports on its web site. Ironically, the termination of Social Security Statements is occurring simultaneously with the release of a study that shows how effective the statements are in educating the public about their Social Security benefits.

In a study of Social Security Statements, researchers at the Center for Retirement Research at Boston College analyzed whether receiving a Social Security Statement boosted knowledge of future benefits. It does. Before Statements were introduced in 1995, workers had to apply online for information about their benefits and wait a month or more for an answer. Those who went through this time consuming process were much more knowledgable about their benefits than those who did not. But only about half of households made the effort before age 62. Enter the Social Security Statement, which provided benefit information to every worker every year without requiring them to contact the SSA. The Center for Retirement Research study found that receiving the Statement boosted the percentage of workers who could estimate their future benefits by up to 20 percentage points.

Alas, the Statement is no more. For those who want to know what their future retirement benefit will be, the Social Security Administration has some advice: "You may be able to estimate your retirement benefit using our online Retirement Estimator." In other words, goodbye and good luck.

2 comments:

rseq said...

"Your Social Security Statement" (Form SSA-7005-SM-SI) contains a record of all your taxed social security earnings for your entire work history. In addition it gives an estimate of your Social security monthly benefit at retirement age.

Before the suspension, SSA automatically mailed all working individuals their statement 3 months prior to their birthdate.
What the SSA didn't think about before suspending the statement is that many employer pension plans require that an employee planning to retire must submit a copy of the SS statement because many company pension benefits are adjusted (offset) by the amount of the Social Security benefit.

This is exactly what has happened to me. I've called the SSA and was told they will NOT send me my statement even though my employer requires that I submit it in order for them to process my retirement pension paperwork. I'm sure there are thousands of people in the same boat as I am. What are we supposed to do??? This is just another example of how dysfunctional our government is.

Jerry said...

@rseq - While I certainly won't argue that the federal government isn't dysfunctional, it seems to me your unfortunate situation is evidence of your company's dysfunction, not the government's.