Social Security Offering Personalized Benefit Estimates

The Social Security Administration announced Thursday that it will offer all workers personalized reports estimating their future retirement benefits and the payments they can expect if they become disabled.

The new, free service will provide a clearer picture of the limitations of Social Security benefits and encourage individuals to do a better job of financial planning, Social Security Commissioner Dorcas R. Hardy told a news conference.

People may “expect more than Social Security actually provides,” she said.

Currently, Social Security answers 3 million requests a year from workers seeking statements of how much they have earned and a rough estimate of their retirement benefits at age 65.

The new reports, which will be available on request from the agency, will provide this information in a much more comprehensive form, listing workers’ earnings for each year since 1951 and the corresponding amount of Social Security taxes that they paid. The annual listing will alert workers to any errors in their earnings as reported to the Social Security Administration by their employers.

Data for Different Ages

The form will give estimates of retirement benefits at 65 and 70 and at an earlier age if requested. Workers may take early retirement and begin collecting a reduced benefit at age 62.

The form will include a space for workers to estimate their future earnings so they can calculate their likely benefits more precisely if they choose.

Each worker will also receive an estimate of benefits that would be paid if he or she were disabled and approximate survivors’ benefits available to spouse and children if the worker dies before reaching retirement age.

Commissioner Hardy said she expects about 6 million requests a year for the estimate.

Free Phone Call

The Request for Earnings and Benefit Estimate Statement (Form SSA-7004) can be obtained by calling the toll free number 1-800-937-2000. The order form will be available in local Social Security offices.

“I believe it is important that American workers both understand what their Social Security tax dollars are paying for and have confidence that their earnings are being properly credited towards their future eligibility for Social Security benefits,” Hardy said.

“This new, comprehensive earnings and benefit estimate statement will do this while demonstrating that Social Security is more than a retirement program--that disability and survivors’ benefits are also important parts of the total package of protection paid for with those taxes,” Hardy said.

The Social Security Administration has been developing the new benefit form for two years and has spent $300,000 for new computer software. It will cost about $2 million a year to process requests and mail the completed estimates to workers, Hardy said.

Time Limit on Errors

She encouraged workers to ask for a benefit statement at least every three years because the deadline for correcting errors in earnings records reported to the Social Security Administration is three years and three months. Benefits are based on earnings.

“We look to the individual to help us correct earnings records,” Hardy said.

More than 110 million workers now paying Social Security taxes will be eligible to request the new benefit statement.

About 38 million people now receive Social Security benefits. The average retirement payment at the beginning of 1988 was $513 a month. The average disability payment was $508 a month.