Best Results Organizing

One year ago this week, in Social Security Goes Paperless & Gets Lean, Green & A Little Mean, we discussed the modernizing of Social Security, and delved into how the federal government intended to save money by making Social Security go paperless.

Paper Doll reported that new applicants for Social Security could no longer opt to have paper checks mailed and that current recipients would have to transition to electronic payments.

I also reported on another paper-related Social Security issue that I believed might have a profound impact on America’s workers. From 1999 through April 2011, the Social Security Administration had mailed annual statements about twelve weeks prior to each taxpayer’s birthday. At best, these statements prompted (OK, nagged) workers to pay attention to how much money they could realistically, with current figures and legislation, expect to receive in retirement.

At best, this annual mailing provided an opportunity to review the accuracy of one’s Social Security records and to consider what other financial savings and investment instruments would be necessary to thrive in retirement. I say, “at best” because I know that those statements were often ignored, kept haphazardly, or tossed away–and not even shredded! Indeed, a little over two years ago, in Lost and Found: Social Security Statements, I tried to impart the importance of gathering and reviewing annual statements, and replacing missing ones.

As a reminder, in addition to understanding your prospective future retirement benefits, reviewing your Social Security statements serves multiple purposes:

—Identifying under-reporting errors, likely caused by an employer neglecting to provide an accurate 1099 to the IRS

—Identifying over-reporting errors, likely caused by identity theft, wherein someone is fraudulently using your Social Security number to secure employment

—Providing proof (for yourself or your family) that you have qualified to receive Medicare, disability or retirement benefits

THE NEW SOCIAL (SECURITY) ORDER

As I reported last May, the $70 million cost of mailing annual statements to more than 158 million Americans became too much of a financial liability, and the federal government suspended the mailing of paper statements. Unfortunately, the decision caught everyone a bit unprepared.

The Social Security Administration was able to provide a secure Benefits Estimator, but it lacked most of the essential vital information provided by the old paper statements (e.g., lifetime earnings history, estimates of disability and survivor benefits, etc.). The Benefits Estimator also only provided online access to workers who had earned at least the forty work credits necessary to receive a benefits payout.

In other words, for the past year, those with fewer than ten full years of work experience had no opportunity to access personalized Social Security information to plan their financial futures. Thankfully, this is no longer a problem.

YOUR FINANCIAL HISTORY AND FUTURE: ONLINE

Effective May 1, 2012, you can create your own Social Security online account (of which, more later) to obtain a wide variety of useful information about your earnings history and future benefits. The data available includes:

Your financial history:

• A chart of your lifetime earnings according to the Social Security Administration’s records
• A chart of estimated Social Security and Medicare taxes you’ve paid into the system

Estimated future financial benefits:

• Estimates of any retirement and/or disability benefits you may receive (based on current information in your account and current legislation)
• Estimates of benefits that may be due to your spouse, once you begin receiving Social Security benefits
• Estimates of survivor benefits that may be due to your family after you are deceased

Other important information:

• General information about Social Security for everyone
• Advice and information for workers aged 55+ who are contemplating retirement
• Information about qualifying and signing up for Medicare

Your online account also grants the opportunity to apply online for retirement and disability benefits and provides a printable version of your Social Security Statement.

CREATING YOUR ONLINE ACCOUNT

In order to access your records online (or help a less web-savvy older relative do so), it’s necessary to create a My Social Security account. The process isn’t difficult, but some of the steps can be a little persnickety.

1) Make sure you have the information you’ll need: your Social Security number, a valid email address, and a U.S. mailing address. (Note, you must be at least 18 years old to create your account.)
2) Go to https://www.socialsecurity.gov/mystatement/ and click on “Sign In or Create An Account.”
3) Read the essential information and agree to the Terms of Service.
4) Provide your name, Social Security number, date of birth, email and home address. You’ll also be asked to provide a phone number to verify your identity.

At this point, the system offers an extra security precaution by allowing you to opt in to receiving a text message any time your online account is accessed.

5) The Social Security system will also ask you a series of multiple-choice questions regarding your personal financial history, such as credit cards you own or loans you may have secured. If you’ve ever accessed your credit reports through AnnualCreditReport.com, these questions (for which “None of the above” seems to be the correct answer more often than not) will seem familiar. Sometimes, the questions can seem a little obscure.

6) You’ll be asked to create a user name and password, just as when you create any online account. However, most of us usually ignore the instructions and just jump in to create a password; sometimes, we’re alerted that oops, our passwords aren’t long enough or lack the right characters. This system is picky. Be sure that your password:

–Has at least 8 characters
–Includes letters AND numbers
–Includes at least one “special” character, like @, &, *, ^ or any of the other wacky ones that usually AREN’T allowed in passwords.

Of course, you also need to make sure you’re creating a password that is both memorable and yet not identifiable (or guess-able) by others.

You’ll also have to select three security questions and provide answers, which may later be used to help you verify your identity, should you forget your password or allow it to lapse. (Note: your account password expires after six months.)

LOGGING IN TO YOUR ACCOUNT

Upon signing in, you’ll see three tabs — My Home, Help Center and Security Settings.

My Home includes three useful pages:

1) Overview — includes important messages, a summary of estimated benefits as of your full retirement age and your last reported annual earnings. It takes the Social Security Administration some time to catch up with income tax return filings, so your 2011 earnings may not yet appear.

2) Estimated Benefits — includes both general information regarding issues like how you qualify for benefits and how benefits are estimated, as well as personalized, specific information regarding your actual benefits. This page lists your estimated retirement benefits if you retire at your full retirement age, as well as at 62 or 70. The system also provides an estimate of disability benefits, as well as any survivor benefits for which your family might be eligible.

The Estimated Benefits page also identifies whether you’ve earned enough quarterly work credits to qualify for Medicare at age 65.

3) Earnings History — lists your taxed Social Security and Medicare earnings for your entire work history, dating back to the first year in which you were employed and had Social Security and Medicare taxes withheld (or applied). This page includes yearly listings as well as a summary, for your earnings life thus far, for both Social Security and Medicare taxes paid into your account, both by you and by any employers you have had.

The Earnings History page also includes information regarding how to contact the Social Security Administration to correct errors in your record.

The Help Center includes a series of Frequently Asked Questions regarding Social Security cards, retirement, disability, Supplemental Security Income and Medicare.

The Security Settings page allows you to customize your settings, including your email address, password, and security question, and lets you revisit whether you’d like to receive text messages to alert you when your account has been accessed.

Oddly enough, although the Social Security Administration has managed to go high-tech, their online sample statement is still a PDF of an old printed statement.

ORGANIZING YOUR FINANCIAL FUTURE

Each of the three My Home pages includes a “Print/Save Your Full Statement” link. When you click it, the system automatically downloads a PDF version of your current statement to your hard drive.

I encourage you to change the name of the PDF from “Your Social Security Statement” to something you can sort by year, and, if applicable, by name (in case you and your spouse share a computer). For example, I might name my current statement SocSecJulie2012.

The move to a digital format doesn’t make organizing and reviewing your financial information any less important. While access is made more convenient, you no longer have an automatic prompt in the mail each year. To give your financial planning the kick in the pants that we all need, take a moment right now to open your new My Social Security account.

Next, schedule a date on the calendar (perhaps the day before your birthday) to check and download your Social Security statement. If you liked the old paper system, print the PDF and keep it in your filing system. Otherwise, just maintain the PDF on your computer or in the cloud.

Consider this scheduled event an excellent opportunity to review your benefits estimates as well as your other retirement investment returns. This is also an ideal time to schedule appointments with your financial team (e.g., accountant, Certified Financial Planner, financial organizer, estate-planning attorney, etc.).

THE DIGITAL DEBATE

Complaints abound that going to a digital-only reporting system will cause confusion and inconvenience, particularly among older Americans. However, any worker over the age of 60 who has not yet applied for benefits will still receive a paper statement, and any seniors already receiving Social Security will still receive information regarding changes (increases in benefits, revised costs of Medicare, etc.) in the mail.

More importantly, the world is progressively moving online. Banks and vendors are increasingly charging to send paper statements or suspending their use altogether. The U.S. Postal Service is all but certainly going to eliminate a day of mail service. And the annual environmental and fiscal costs of printing and mailing statements to 160+ million Americans is simply untenable.

Just as it was once necessary to learn how to operate a telephone (and eventually, an ATM), one cannot live in the world without learning how to use a computer. “I hate computers” is simply not an acceptable excuse for someone born in the 1950s or later to not take responsibility for his or her financial future.

Setting up an account takes approximately eight minutes. Checking and printing one’s statement can be accomplished in under three. If one is unwilling to spend three minutes online each year to access vital information, the issue is not one of technophobia; it’s a matter of making excuses for fiscal irresponsibility. And no federal agency (or professional organizing blogger) can help with that.

So sign up, log in, and use the information to help you organize a great retirement.