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The Redesigned Social Security Statement’s Short-Term Impacts on Near Retirees

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Abstract

In October 2021, the Social Security Administration (SSA) implemented a redesigned Social Security Statement for workers scheduled to be sent a paper Statement or checking their my Social Security online accounts. The new statement is half the length of the prior Statement, and instead of solely numerical estimations of future benefits, the redesigned Statement includes a graphical depiction of how claiming later affects monthly benefits. This redesign holds the promise of effectively presenting both general and personalized Social Security knowledge, even more so than the prior Statement, which was shown to increase knowledge, change expectations, and increase disability claiming rates (Smith and Couch 2014b, Armour 2018, Armour 2020). In this study, we field a new survey module in the long-running Understanding America Study, where approximately half of respondents were exposed to the redesigned Statement due to their birth month, and the other half were sent the prior design. We elicit preferences over the features of the redesigned Statement, as well as how the redesigned Statement affected knowledge, planned claiming and retirement ages, and actual claiming behavior. Respondents strongly preferred the new format. This format changed planned claiming and retirement ages, and it delayed actual benefit claiming. Effects were strongest among those with low levels of Social Security knowledge prior to receipt. Our findings add to a growing literature on how the Social Security Statement can be an effective channel for Social Security’s communications about future benefits.

Key Findings

  • We conducted a survey to understand the early impacts of the redesigned Social Security Statement.
    Ninety-one percent of respondents ages 60 to 70 who have not yet started receiving Social Security report having received a Statement.
  • Over 90% of respondents who received a Statement report reading them somewhat or very carefully, and only a handful (less than 10 respondents) report not reading the Statement at all. Those who received the redesigned Statement were more likely to report reading it carefully than those who received the old Statement.
  • Recipients of the redesigned Statement were more knowledgeable about Social Security and key claiming dates than recipients of the old Statement.
  • The redesigned Statement had a substantial impact on the claiming and retirement plans of those with little prior knowledge of Social Security, and only a marginal impact on those with very high knowledge of the Social Security system.
  • In a head-to-head comparison of key aspects of the Statements, respondents preferred the redesigned Statement and found it to be clearer than the old Statement.
  • Taken together, these results suggest that it has improved knowledge of the program and informed planned and actual claiming decisions.

Citation

Armour, Philip, Katherine Carman, and Mandlenkosi Dube. 2022. “The Redesigned Social Security Statement’s Short-Term Impacts on Near Retirees.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2022-444. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp444.pdf

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Project

Paper ID

WP 2022-444

Publication Type

Working Paper

Publication Year

2022