Monday, October 4, 1999

You've got mail

Social Security contributors in
Hawaii will begin receiving annual
financial statements thanks to a
national program that
started last week


By Russ Lynch


BY anyone's standards, it's a huge mail-out with a hefty postage bill.

In Hawaii alone more than 630,000 people will get a four-page letter from the Social Security Administration in the coming year, each tailored personally to give the individual a breakdown of his or her benefits.

It is part of a national program to provide an automatic update to everyone qualified for Social Security, costing about $70 million a year to mail out an annual statement to each of America's 125 million workers age 25 or older who are not already receiving Social Security benefits.

And Social Security officials here and in Washington say it does more than just detail everyone's employment and earnings history and the amount payable in retirement years. It also serves as an important reminder that Social Security isn't just about retirement.

It's America's "family protection plan," the department says, because of the disability and survivors' insurance aspects that pay benefits to many workers and families who are well under the minimum age of 62 to qualify for the retirement benefit.

In fact, one out of every three Social Security recipients today is not a retiree. They include workers too disabled to hold a job, members of a disabled worker's family, or survivors of workers who died.

Many people aren't even aware that those benefits exist and the letter explains more about what they are and gives tips on where to find even more information on the Social Security Web page, by telephone or by visiting the local Social Security office.

The financial details themselves promise to be fascinating. The letter gives each recipient:

Bullet A year-by-year list of all income that was taxed for Social Security purposes.

Bullet What monthly payment the worker gets if he or she retires at 62, or full retirement age (which ranges from 65 to 67 depending on birth year), or 70, with information about how the payment goes down or up depending on how long the person keeps working.

Bullet What the monthly payment will be if the person becomes disabled right now.

Bullet Benefit amounts payable to family, spouse or children if the worker dies this year.

Keith Fontenot, assistant deputy Social Security commissioner for policy in Washington, said that each worker will get the personalized statement about three months before his or her birthday. It is important to look through the statement carefully, because it also serves as an opportunity for the taxpayer to correct any error that may have been made, he said.

It also makes assumptions for the future which the particular recipient can see won't be right. For example, it assumes that the worker will keep on until retirement at the same wage earned in the current year.

The letter will contain contact information if the recipient finds an error that needs to be corrected.

Workers are entitled to update the information and get a new individual estimate at any time, he said.

A sample statement being sent out for information purposes only details the work history and benefits of "Wanda Worker, 456 Anywhere Avenue, Maintown."

It shows Wanda's earnings ranging from $742 in 1976 to $30,334 in 1998. If she stops working at 62, she is entitled to $746 a month. Retiring at her "full retirement age" of 67 she would get $1,096 a month and if she keeps working until 70 she would get about $1,365 a month.

"If you became severely disabled right now, your payment would be about $950 a month," Wanda is told. If she dies this year, she has enough credits for her family to receive up to $1,835 a month, or a maximum of $750 a month for a child, $750 a month for the surviving spouse who is caring for the child, or $1,000 a month for the spouse when he reaches full retirement age.

There also could be a one-time special death benefit of $255 for the spouse or minor child.

The statement shows that Wanda paid Social Security taxes totaling $20,563 through her entire working life.

Social Security officials are promoting the new four-page statement, which replaces a more complex six-pager that was sent out on request in earlier years and more recently to a sampling of the population, as an important tool in financial planning.

But the statement also contains this caution:

"At present, Social Security is the largest source of income for most elderly Americans and plays a major role in keeping them out of poverty.

"But Social Security can't do it all. Social Security benefits were not intended to be the only source of income for you and your family. You'll need to supplement your benefits with income from a pension plan, savings or investments.

"Think of Social Security as a foundation on which to build your financial future."

Note also, that unless you're 70 or older, other income can count against Social Security benefits and it's wise to understand your entire financial position before filing a claim for benefits.


Bullet WHAT: Goes to 125 million Americans each year, starting now, including 630,000-plus in Hawaii.

Bullet WHO GETS IT: Every worker age 25 and up who is not already receiving monthly Social Security benefits.

Bullet WHAT DOES IT SHOW: Your individual earnings history, taxes paid for Social Security, taxes paid for Medicare, dollar amounts available to you and/or your family upon early retirement, late retirement, death, disability etc.

Bullet WHERE TO GET MORE INFORMATION: On the Internet, go to Toll-free phone call, 1-800-772-1213. Visit the Social Security offices. On Oahu they are in Room 1123 in the Prince Kuhio Federal Building at 300 Ala Moana and in the the Pearl City Plaza at 719 Kamehameha Highway.

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