Social Security to Detail Benefits in Mass Mailings

The Social Security Administration will begin mailing annual statements to 125 million working Americans beginning Friday, telling many for the first time how much they’ve paid into the nation’s retirement system and what they can expect to get back.

“We’re hoping it will help people understand what Social Security can provide but also encourage them to do further planning for retirement savings,” said Commissioner Kenneth S. Apfel. “It’s hard to live just on Social Security.”

In the past, the Social Security statements have been available upon request, and 37 million Americans have asked for theirs since 1988.

The personalized letters will be mailed automatically, in batches of 500,000 a day, timed so that every worker older than 25 will receive an updated one each year about three months before his or her birthday.

Congress voted in 1989 to require the mailings, which, at 56 cents a letter, will cost about $70 million a year. Because of the personal nature of the information, Social Security officials said, the letters will be mailed first class.

Commercial Data Center Inc., a printing company outside Dayton, Ohio, which got the contract for the job, has hired 20 new employees and will be dropping off 40,000 pounds of mail a day at the city’s airport.

Not even the Internal Revenue Service does a bigger mailing to American households each year when tax forms go out.

The Social Security Administration has been gearing up for the enormous task since 1995 by sending sample statements to about 73 million people, most over age 40. The statements have been simplified during the course of the test to a four-page format that includes:

* A two-column chart showing annual earnings for each year subject to Social Security and Medicare taxes from a person’s first job to 1998. These numbers are significant because the amount of future Social Security benefits depend, in part, on a person’s past earnings and tax contributions. In 1998, all earnings were subject to a 1.45% Medicare payroll tax, and earnings up to $68,400 were subject to a 6.2% Social Security tax.

* The total amount of taxes a person has paid into the retirement system over the years and, separately, what his or her employers have paid. Employers must match employees’ Social Security and Medicare contributions.

* Estimates of monthly retirement benefits assuming a person continues earning at his or her current salary level until retiring early at age 62; on time at 65, 66 or 67; or late at age 70. The age of eligibility for full Social Security benefits is scheduled to rise incrementally to 67 from 65. Those who choose to retire even later get higher monthly benefits.

The letter also gives a toll-free telephone number that people are urged to call if they find mistakes in their statements.