Social Security Administration changes its mind
September 22, 2014
by Brian Wolf

What does the Social Security Administration and the US Postal Service have in common? Well they both like to use stamps.

Don't look now, but the Social Security Administration is going back in time. They recently announced that they are changing their rules again and will resume mailing estimated benefit statements to most workers every five years. They will still want you to create your own personalized Social Security accounts online, but now it's not mandatory in order to get your benefit statement.

This statement is, of course, very valuable because it tracks your earnings, tax contributions, and estimates for future retirement, disability, and survivor benefits.

Apparently 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.

In 1999, the Social Security Administration began mailing annual estimated benefit statements to workers 25 and older. 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 an estimated $70 million annually in printing and postage. However, just because you can save some money doesn't mean it will be popular, and, in this case, a lot of people didn't like it. So cost saving aside, they decided to go backwards to the paper version.

"We have listened to our customers, advocates, and Congress," acting Social Security 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 percent of American workers.

Anyone who is 18 or older can sign up for a Social Security account. 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.

There are many reasons that you would want to keep an eye on this throughout your lifetime; the most important is to just to make sure they have it correct. In my financial planning career, I have seen many of these benefit statements that were incorrect.

Think of it this way; even if your Social Security benefit account is like a personal savings account that you can't control, you still want to make sure they credit you correctly for every year of contributions that you make. I have seen statements that showed no income over a couple of years, when the client obviously worked and paid in during that time frame.

Since you aren't personally turning in a deposit slip to anyone, you really do need to keep an eye on it every year. I'm not sure if this is still the case or not, but at one time, you only had three years to correct an error – otherwise you were out of luck.

I recommend you do yourself a big favor and sign up online and check it for mistakes every year. Don't wait for the post office to deliver your Social Security benefit statements. After all, they might just show up by pony express.

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