Paper Social Security benefit statements are making a comeback — sort of. In response to my query last week, Social Security Administration spokesman William Jarrett confirmed that the agency will resume mailing personalized estimated benefit statements to some American workers in September.
But not everyone will receive a paper statement and the ones who do will receive it only every five years.
“Social Security is finalizing a plan to increase the number of people receiving Social Security statements annually,” Mr. Jarrett wrote in an e-mail. “We will continue to promote the use of our online statement and will continue to educate visitors to our field offices and help them register for 'My Social Security'” online accounts, he said.
The SSA 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.
(See who is signing up for online statements.)
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.
Personalized digital statements, identical to the old paper versions, first became available in May 2012. To access your information, you must set up a personal account at www.ssa.gov/mystatement.
More than 10 million Americans have signed up for a personalized account at the SSA so far. While online account signups have more than doubled over the past year, it's still a drop in the bucket, representing only 6% of American workers. Consequently, Congress urged the SSA to do a better job in disseminating this critical information.
So beginning in September 2014, SSA will resume mailing paper statements to workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 and over who are not receiving Social Security benefits and who are not registered for an online account, Mr. Jarrett explained.
In addition to estimated retirement benefits at various claiming ages, your personalized statement includes estimates of how much you could collect if you became disabled before retirement age or how much your spouse could collect in survivor benefits following your death.
Equally important, the statement provides individuals with a complete earnings history, which is the basis for future Social Security benefits, and the total payroll taxes paid on those earnings throughout their career. Clients should review it each year and make corrections if needed by contacting the SSA at (800) 772-1213.
Anyone who is 18 or older can sign up for a Social Security account. To do so, 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.
The magic age for unlocking Social Security benefits
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 were among the more than 40 million Americans whose credit card information was hacked during the holidays, and you subsequently took steps to freeze your credit report to prevent future identity theft attempts, you may have a problem.
As it states on the Social Security website, “You cannot create a My Social Security account online if you have a security freeze, fraud alert, or both on your Experian credit report.”
Experian, one of the three major credit bureaus, oversees the agency's online verification process. A security freeze is designed to prevent credit, loans and services from being approved in your name without your consent. But it may also delay or prohibit the timely approval of any new credit, loans or services, including establishing an online Social Security account.
If you don't want to remove the freeze or alert for security reasons, you will have to visit your local Social Security office in person and bring a government-issued ID to set up an online account.