Did You Miss Your Social Security Check?

     Wait, don't panic! I'm not talking about your monthly payment if you're already receiving Social Security. I'm talking about the annual check-up of your prospective benefits, called "Your Social Security Statement," which the Social Security Administration has been sending out for years, usually in April.

     I have all my statements safely tucked away in my filing cabinet, going back to 1998. Every time I look at them, I am amazed that the Social Security Administration has a record of all my earnings, going back to that summer of 1967 when I earned $109 as a camp counselor. And, yes, as you can see, I am paying close attention to Social Security. Yes, I am counting on those checks to help me through retirement. And yes, I like to check the "balance" in my account once a year, which gives me a feeling of comfort that I will have at least some income to pay my bills even though I won't be working, that I will have income to keep a roof over my head, no matter what happens, even as I begin to lose my faculties and my abilities to take care of myself.

     But this year, in an apparent move to save money, the Social Security Administration did not send out the benefits statements. Instead, to get an estimate of your benefits, you must go on the Social Security website and "do it yourself" with the Social Security Retirement Estimator. The estimator is useful for those who qualify but are not currently receiving benefits. (If you're already receiving benefits, presumably you know how much you're getting and you don't need any estimator.)

     The estimator gives you three key numbers:

     1)  What your monthly benefit will be if you stop working at age 62 (or, your current age if you're over 62 but under full retirement age).

     2)  What your monthly benefit will be if you wait until your full retirement age. As a reminder, for people born between 1943 and 1954 full retirement age is 66. Then full retirement age increases in two-month increments for those born after 1954, until it reaches 67 for those born in 1960 or later. (Presumably if Congress decides to raise the retirement age it will affect only people born after 1960.)

     3)  What your monthly benefit will be if you delay taking benefits until age 70.

     These three numbers dramatically illustrate how much it pays to wait. Your benefit increases about 8 percent a year, or over 30 percent from age 66 to age 70. And that is a pretty amazing rate of return in this era of 1 percent interest rates on bank CDs or U.S. Treasury bills. Indeed, the current rate on a 2-year Treasury bill is less than 0.5 percent. The rate on your Social Security benefit is 8.0 percent. It doesn't take a genius to figure out that it's better to delay Social Security than to invest in a U. S. Treasury bill.

     But, you say, maybe Social Security payments will be cut. Maybe they'll be taxed. Maybe the debt ceiling won't be raised and Social Security checks won't go out at all! (Or to be accurate, electronic disbursements since actual checks are a thing of the past.)

     But remember, it's the same government that's paying you, whether you're getting 0.5 percent from a Treasury bill, or 8.0 percent from Social Security. If the government isn't going to pay, we're all in trouble. If it's going to raise taxes, it's more likely to raise taxes on interest payments than on Social Security payments. And anyone who's proposing changes to Social Security is only talking about benefits for people who are under 50 or 55 years old. So, while that may be a legitimate policy issue to discuss and argue over, it's not really our problem, is it?

     Of course, the other thing to consider is that you may die when you're 64 or 68. So if you wait, you won't get any Social Security at all. But let's face it, if you die, you lose your savings as well ... it doesn't go to you, it goes to your heirs.

     But the fact is, if you're a nonsmoking 60-year-old female, you can expect to live to age 87. If you're a nonsmoking male, to 84. Wouldn't it be nice to have 30 percent more money for those 15 or so years -- not to mention the insurance of knowing you'll enjoy the extra income if you do happen to live longer, especially since running out of money in your 80s or 90s is the biggest financial worry of all.

     If you want some kind of scientific estimate of how long you are going to live, fill out the free life expectancy calculator. You'll see, you're probably going to live longer than you think. (Just be ready for some scolding. According to the calculator I'll be around until age 92, but it's still telling me to cut back on sweets and get more exercise!)

     I have to confess, there's a little part of me that wants to apply for Social Security RIGHT NOW, to start getting that money into my arthritic little hands, and to make sure I get at least some of what's due to me. After all, I've been paying into the system since 1967, and it's about time I got some of it back.

     Unfortunately, according to a report on retirement income from the U. S. General Accounting Office, roughly three quarters of eligible people fall for that short-term thinking and elect to start receiving Social Security benefits before their full retirement age. Three quarters of us! Even the GAO says that these people are cheating themselves.

     For most of us between ages 55 and 65, unless we have a life-threatening disease, or really need the money to pay room and board, it's better to hold'em than to fold'em. So don't get scared into cashing in your chips too soon. Hold out for that 8 percent return.