As if there weren’t enough problems surrounding the whole issue of retirement, a new one is rearing its head: a cutback in statements from the Social Security Administration to workers.

That’s according to research by Barbara Smith, a senior economist at Social Security’s Office of Retirement, and Kenneth Couch, a professor at the University of Connecticut. Money reports that, in a paper being presented this week at a George Washington University seminar, the pair say that mailed statements from the SSA “had a significant effect on claiming behavior,” and that the cuts could make it less likely that people will wait to claim Social Security benefits till later in life.

Since benefits can be claimed at any time from age 62 till age 70, there’s quite a range of time during which someone might decide to retire and file a claim.

Statements have been instrumental in that decision, and earlier research by Smith and Couch indicates that those statements have been more effective than information available on the SSA’s website at educating workers on the various benefits and programs the SSA provides.

Both the statements and the website provide workers with their complete wage history, as well as estimates of Social Security benefits they could collect at various retirement ages.

Seeing those numbers in black and white apparently makes an impact, since people who rely on the statements as part of their planning process tend to retire later—increasing their Social Security benefit while at the same time reducing the length of time they’ll need to draw on it.

The statements have variously gone to a selected age group beginning in 1995, then to workers aged 25 and older beginning in 2000. Those mailings were cut back in 2011, but then resumed for workers aged 60 and older; in 2014, the SSA went back to sending them to most working-age people every five years, beginning at age 25.

Now, however, the SSA is cutting back again. In January it announced that it would only send statements to people 60 or older who don’t already receive benefits and who don’t have an online Social Security account. It’s eliminating mailings for people turning 25, 30, 35, 40, 45, 50 and 55.

The researchers write, “Our results, although preliminary, suggest that the provision of information might be an effective tool for policymakers interested in encouraging retirement security by having workers delay claiming Social Security benefits and work longer.”

But the SSA is going in the opposite direction, in the name of saving money; cutting back on the statements it sends will save the administration $11.3 million.

Doug Walker, deputy commissioner of communications for the administration, cited an SSA hiring freeze in January and is quoted in the report saying, “We have fewer resources to serve more people.”

Instant Insights /

How a cutback in Social Security statements could add to retirement woes

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