This paper from the Michican Retirement and Disability Research Center examines how the 2014 reintroduction of the Social Security statement, staggered by every fifth birth year, affected Americans’ Social Security expectations, savings behavior, and labor supply. You might think the statement would be one more piece of mail opened then thrown away, but that is not the case. The majority of individuals who were sent a statement recall receiving one, and highly valued them. Here are the key findings:
- Individuals highly value information about their benefits from SSA. Individuals report the statement and my Social Security accounts (an online account on the Social Security website allowing individuals to check their potential benefits) useful for planning for retirement and deciding when to claim Social Security benefits, especially in years leading up to retirement.
- After being sent a statement, individuals are more likely to report expecting to receive future benefits, especially disability benefits. They are also less pessimistic about the possibility of future cuts to the social insurance programs, specifically about a 10 percent drop in their reported expectations that Congress will make the Social Security system less generous in the next 10 years.
- Among those already expecting benefits, there does not appear to be much change in expectations for either claiming age or the benefit amount upon claiming. There are no measurable changes in retirement savings through IRAs, pensions, or other long-term savings vehicles, although these estimates are preliminary and future analyses by subpopulations may allow for more precise measurements.
- Those who have a mySocialSecurity account tend to be better informed about program details, even before signing up for their account.
- Among those sent statements, many either did not receive them or forgot having received them. These individuals are much more likely to be younger than 30.
- The effect of being sent a statement recently had a varied impact on work behavior. For those previously working more than 40 hours per week, the statement reduced hours worked. Being recently sent a statement was also associated with re-entry into the labor force among those previously not working.
You can also find a Squared Away Blog post on this paper here.