The Social Security Administration, in the past, mailed a full annual report to workers about their Social Security benefits. The report was easy to recognize because the header on the top and bottom of the multiple pages contained bold green lines.
The so-called Green Line form is important because it identifies the Social Security payment amount workers should expect at full retirement age. It also identifies the payment amount workers should expect if benefits start at age 62 or how much workers should expect if the payments are delayed until age 70. In addition, this Green Line form shows how much FICA taxes and Medicare taxes are paid each year into the system.
Typically, workers casually read these monthly numbers and then continued on dealing with life’s daily challenges. The Green Line form didn’t typically draw a lot of attention. Why?
· Maybe, because the form was text intensive, folks did not fully appreciate the valuable information that was presented to them about one of their most valuable retirement assets.
· Maybe, because the retirement income numbers were reported so regularly, they did not actually jump off the page and generate a “wow” reaction.
· Maybe, because the FICA taxes that generate Social Security retirement income are an automatic deduction from their income, workers tended to forget how much is paid into the system and how much real value Social Security contributes to a secure, inflation-protected income in retirement.
Beyond the lack of attention, mailing the Green Line form to each worker in the United States was an expensive process for the Social Security Administration. With the emergence of almost universal access to the internet and growing online access to the Social Security website, the full Green Line form statement is now only available through the creation of a "myAccount" on www.SSA.GOV. For everyone under age 60, the Social Security Administration shifted the delivery of this form from print to electronic media. For people age 60 and older, the U.S. Mail is still delivering the Green Line form each year.
In May 2018, MassMutual released the results of their recent study that polled workers age 50 to 59 to see how much they knew about their Social Security benefits. One of the most shocking results from this study shows that 86 percent did not take time to create a Social Security myAccount . As a result, workers who should now be actively planning for retirement do not have access to their Green Line form and, therefore, do not have accurate information about their benefits.
“Getting Social Security right is critically important to inform plans for other income-stream needs later in life, as it may be difficult, and sometimes not even possible, to hit the reset button,” said Mike Fanning, head of MassMutual U.S., when those findings were released .
Yet without access to the Green Line form, making decisions about Social Security filing strategies is just about impossible.
Using today’s interest rates, how much it would cost a married couple, age 70, to buy a lifetime income annuity, adjusted for a 2 percent inflation rate, that would guarantee that each of them would receive $2,500 a month for life? This clone of Social Security income in the commercial marketplace likely would cost the couple over $1 million!
The Green Line form provides the information workers need about this potential $1 million-plus asset.
It is easy to sign up for a Social Security myAccount. Just visit www.socialsecurity.gov/myaccount and follow the prompts. After all, if you had a $1 million asset, it would be a good idea to see how it is doing!
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