On Monday, January 9, 2017, the Social Security Administration announced that due to budget constraints it would stop mailing paper Social Security Statements to most American workers for the second time in the last six years. “Only people 60 or older who have not yet established an online my Social Security account with the agency and who are not yet receiving Social Security benefits will be mailed annual statements,” announced Doug Walker, Deputy Commissioner, Communications for the Administration.
Many of you might be thinking, what statement? Great question, unless you turned 25, 30, 35, 40, 45, 50, 55, or 60 since September of 2014, you weren’t mailed a paper statement. Since that time they only go out every five years. Although you may recall getting a statement once a year in the “good old days,” the government to save money, first stopped mailing paper statements in April 2011, in anticipation of your being able to view your statements online beginning in May of 2012, as noted above.
Paper statements were first eliminated in 2011 for most taxpayers
The move to eliminate paper statements at that time prompted an outcry from taxpayers and financial planners alike, who argued that the paper statements provided an invaluable reminder each year to check the accuracy of our earnings records, and determine what our families and we could expect to receive in benefits under various scenarios. (Retirement, Death, Disability).
The Social Security Administration promptly reversed course in late 2014 and agreed to re-start mailings at five-year intervals to workers who have not signed up for online accounts or are currently receiving benefits.
With this latest announcement, it appears only those taxpayers age 60 and older will now receive a paper statement annually, unless they have an online account, or have started collecting the benefits. Only time will tell whether a similar outcry will make the SSA reverse course yet again.
Social Security Administration Budget Constraints
Why are they being eliminated once again? The need to lower costs due to an uncertain budget. The commissioner also indicated in his announcement that, “this will bring down the cost of processing and mailing paper statements by $11.3 million in FY 2017.”
He also stated that “Lawmakers in Congress decide each year how much money we can use to manage our programs and pay our staff. Because that hasn’t been settled yet, we are operating under a continuing resolution (CR) with less funding than last year. This is not new for us. In fact, the amount we have to run our programs is 10 percent lower than it was in 2010, after adjusting for inflation. At the same time, the number of beneficiaries we serve has gone up by 13 percent. So, we have fewer resources to serve more people.” Is this an ominous sign of what lies ahead for our Social Security System?
How to still get your Social Security Statement annually
- Create an account online at ssa.gov. Doing so allows you to access your annual Social Security statements whenever you want. Be aware that once you make an account, the SSA will no longer mail you statements. You will, however; receive an annual reminder to review your online statement.
- If you don’t have or want an online account, you can requesta paper statement by completing a form (SSA-7004) and mailing it to the SSA. You should receive your Statement within four to six weeks of mailing the form.
- You can also visit your local social security officeand ask for a printed statement
Why reviewing your Social Security Statement is so important
As your Social Security benefits are based on your earnings record (The 35 years in which you have the highest earnings are used to calculate your monthly retirement payout) you want to be sure it’s accurate.
Social Security Statements are far from perfect. It’s not uncommon to find that earnings from certain employers or entire years are missing. Checking your statement annually for inaccurate or missing information is critical to ensuring you receive the full benefits you are entitled to.
Check to make sure the earned income amounts listed are consistent with your own income records for that year as indicated on your tax returns.
What if I find a mistake on my Social Security Statement?
An error in your earnings record can be corrected at any time up to three years, three months, and 15 days after the year in which the wages were paid or the self-employment income was derived. Hence, you are going to want to catch errors, if they occur, promptly.
Although there are limited exceptions to correcting an error after the timeframe noted above has expired.
Sources:Social Security Administration
SSA Blog “Finding Value – and my Social Security – in light of Budget Cuts.” 1/9/2017 Doug Walker, Deputy Commissioner, Communications
Steven C. Johnson, ChFC, a financial planner with Finivi, has over 25 years of experience in providing financial education programs for numerous private and public corporations, educational institutions, and social and fraternal organizations on the topics of Social Security and Retirement Income Planning. Do you need help planning for retirement and/or maximizing your Social Security retirement income? You can call (800)530-6635 for a complimentary consultation or click here to schedule online.