Paper Social Security Checks Over

Mar 4, 2013 by

Go Direct logoI’m not yet on the Social Security benefit payment rolls—and I sure hope you Gen Y-ers don’t cut off us Baby Boomers before I get my turn to slurp at the entitlement trough—but about 55 million Americans do receive Social Security benefits today. As of March 01 just passed, none can get their benefits the old fashioned way: By paper check through the postal mail.

How to Get Your Social Security Benefits

First, enjoy this 30-second video from the Social Security Administration (SSA) featuring one-time teenybopper Patty Duke and USS Enterprise NCC-1701 Helm Officer Hikaru Sulu (aka George Takei):

Mr. Sulu has certainly taken a step down from his photon torpedo-firing days. Oh well.

Now that you’ve properly been inspired, here are your options for receiving benefits:

  1. Direct deposit into your bank or credit union account
  2. Direct Express® Debit MasterCard®

If you choose the Debit MasterCard®, your benefits are automatically deposited to your Direct Express® account on benefit payment day. You can use the card anyplace that accepts Debit MasterCard®.

My choice would be direct deposit into my bank account. Then I can use my Social Security benefits to cover checks, transfer to other accounts (like my offshore Internet casino account), or electronically pay bills. Why add yet another account—Direct Express®—to your portfolio? “Simple” and “flexible” are two touchstones for me.

Other 2013 Social Security Changes

Besides the move away from paper checks, 2013 brings other changes at Social Security:

  1. As you likely noticed, the temporary cut in payroll taxes to 4.2% has ended. You’re paying 6.2% again.
  2. Unless you’re a high income earner, you may not realize that the Social Security payroll tax becomes zero on earnings over a certain level. That level increased in 2013 to $113,700 from $110,100. So yes, if you earn $1 million dollars in 2013, you pay zero Social Security tax on $886,300—or 89%—of your earnings. The more you earn, the lower percentage of your earnings you pay. This is the definition of “regressive.”
  3. Apparently one of its sharp, young employees recently made the SSA aware of the Internet; starting early in 2013 you could begin doing a lot of the interacting you may want to do with SSA through its website. (Inexplicably, if you’re a U.S. citizen who happens to be living outside of the U.S. like a certain personal finance blogger you may follow, you’re banned from registering for the SSA’s online services. Sigh.)
  4. Given #3,  no reason to keep those high-rent offices staffed by expensive humans open so much, eh? I mean, we all know how keen on using the Web to get things done are most of those in the Social Security benefit recipient age cohort. Beginning January 02, Social Security offices began closing at noon on Wednesdays. (Coincidentally, many bars across the country located near Social Security offices launched Wednesday early afternoon happy hours in 2013.)
  5. Social Security benefit recipients between ages 62 and 66 who work for money might see their benefits temporarily withheld. If you’re age 62-65, $1 of benefit will be withheld for every $2 in earnings over $15,120. If  you turn age 66 in 2013, $1 in benefits will be withheld for every $3 you earn over $40,080. (How do you suppose they come up with these numbers. $15,120? $40,080?) Since the operative term is “withheld,” I assume you’ll get this money back later—if you remain above ground. If you’re not this fortunate, you may rest more peaceably knowing you’ve made the system that much more solvent for your fellow (still living) Americans.
  6. Social Security recipients got a 1.7% raise in 2013.

Social Security Poll

The money you send to the SSA today is not being saved or invested on your behalf; it’s going directly to current benefit recipients. (Might be simpler to hand over to your Ma and Pa a few grand each per year and cut out the middleman.) Commenters, please share your forecast on whether you believe you’ll ever receive Social Security benefits, or do you think the system will mostly or totally be bust before you’re eligible? And along with your answer, please share your age range (e.g., 30s) if you don’t mind.

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