These days, it might seem absurd to criticize a government agency for cutting costs. But the Social Security Administration is catching flak for its decision to stop mailing out annual notices detailing how much workers have paid into the system and how much theyíre scheduled to collect at retirement.
Most of the information will still be available. Youíll just have to use a computer and Internet connection to find it at www.socialsecurity.gov. Federal officials say mailing out 150 million statements costs about $70 million a year. In addition to the cost-cutting arguments, officials also point out the world is swiftly moving toward electronic record-keeping and transactions. Remember how bank lines used to back up around the first of the month, when Social Security checks were mailed out? Today, 88 percent of recipients get their payments deposited directly into their accounts.
Still, suspending the mailed statements has drawbacks. For those who lack Internet access, many of them older citizens or lower-wage workers, it will be more difficult to track important information about retirement benefits. The yearly statement provides a jolt of reality about benefit expectations and the need to save for retirement. It also shows a workerís history of taxable earnings, which allows people to check for mistakes. That wage history wonít initially be available online, although Social Security officials plan to add it later.
Saving $70 million is nothing to sneeze at. However, there are better ways to implement this change. Instead of abruptly stopping mailed statements, why not establish a transition period that gives recipients the option of continuing to receive them for a while? That grace period would ease the transition for some while giving Social Security officials time to make sure all of a workerís wage history data is available online and easily accessible.