It Figures

The government has decided to stop doing one of the few things it does that is of value to us common folk. And of course they did it with little or no fanfare.

Social Security statements halted

One of the most valuable pieces of mail from the federal government every year won't be coming anymore.

It may not rank with an income-tax refund check, but the annual Social Security Statement arriving about three months before workers' birthdays each year was a fabulous service. The statement was probably the single most important financial planning document most people ever received.

The Social Security Administration started mailing the statements in 1999 to everyone over the age of 25. The service was only 12 years old when the agency decided to cut costs by ending the automatic statements. As they say, the good die young.

The mailings stopped without advance notice almost two weeks ago. People with July birthdays and later won't receive one this year. The agency stopped the statements despite not having them available online. It hopes to do so by the end of the year.

Don't hold your breath.

The Social Security Administration says that stopping the four-page statements will save the agency about $30 million in the current fiscal year and $60 million in 2012. Last year, the agency mailed statements to 152 million people. The mailed statements had been available by request since 1988, but the agency no longer takes requests.

$60 million is not even a drop in the bucket of the looming social security shortfall. It's more like a molecule in a drop. Yes, I know that every little bit helps, and we have to start somewhere, and if you save $60M here and $60M there pretty soon it adds up to real money, but still ... this was something useful.

The value of the statements to individuals goes beyond deciding whether to retire with early, full or delayed benefits. By seeing benefit amounts, individuals were reminded they will need other income sources in retirement. The statements were helpful nudges toward starting an individual retirement account or signing up for an employer-sponsored plan, such as a 401(k).

They were valuable for precisely that reason. At a time when it is becoming painfully obvious that social security cannot survive in it's current form, the statements would help make any changes to the program up close and personal. In theory, this would serve to help people prepare for their own retirement, rather than depending on an unsustainable government program that has as its primary objective redistributing wealth from worker ants to fiddling grasshoppers. 

I can dream, can't I...