JUST PLAIN TALK: What's new with Social Security, benefits and statements

Buz Livingston
Buz Livingston

The Social Security Administration, with little fanfare, recently updated its annual benefit statement. In a move designed to reduce costs, Social Security only mails statements to those over age 60 who haven't signed up for electronic access. So I jumped online, hoping to see the setup, but my 2020 benefit statement was in the old format.

Traditionally statements showed projected benefits at age 62, at full retirement age ( for me, 66 plus four months), and age 70. The new statements, though, will show how benefits increase from age 62 to age 70. Incorporating behavioral research, the agency believes the annual tiers will illustrate the robust benefit of delayed retirement credits. For example, payouts increase 8 percent annually until age 70. Due to the nature of their job or health problems, many can't delay; however, the payoff can be substantial for those who can keep working or those who prefer to continue employment. 

According to press releases, the agency downsized the annual review from four pages to two. Brevity is clarity, and the Social Security Administration believes a concise statement will help people learn more about their future benefits. Knowledge is power, too. With the revamped statements, people can make more informed decisions.. A big, avoidable mistake is taking benefits too soon. The most popular age to begin benefits is 62, as soon as possible. I get it for those in poor health, but those who can delay will see benefits increase 8 percent annually. Show me anywhere on the planet you can get 8 percent guaranteed. 

Poking around on the website, I learned I could replace my long-lost Social Security card online. While it warned me Social Security cards were rarely necessary, I decided to apply for a new one anyway, but I  appreciated the heads-up.  

Hopefully, they will keep the bold-faced disclaimer that Social Security benefits are not guaranteed. As noted in every statement, Congress can make changes in the future as they have in the past. Also, they should continue the synopsis of the annual Social Security Trustees report. I've tried reading the full report; trust me, the "Cliff Notes" version suffices. The latest Trustees report estimates that by 2035, payroll taxes will only be sufficient to cover 79% of projected benefits. However, the 2018 statement estimated the shortfall would begin a year sooner, 2034. Unless the law changes, benefits will be reduced, but not eliminated.  

In "Big City," Merle Haggard threw shade on "so-called Social Security." Still, the program is an essential tool for most retirees and people with disabilities. When you can write like Merle, Social Security is optional. Dean Hollaway, Merle's tour bus driver, co-wrote "Big City." Even though Hollaway earned an estimated half-million dollars in royalties, like many Americans, Social Security likely proved beneficial. It's way cool Mr. Haggard shared the credit with his lifetime friend. 

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.