The Social Security Administration faces an enormous challenge in maintaining its services as retiring baby boomers increase demand and budget constraints and staff retirements limit the agency’s ability to provide its services.
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The number of SSA employees has declined sharply over time, from 81,000 FTEs in 1985 to less than 60,000 today. In theory, web-based tools could be helpful, but the share of retirees applying for benefits online has hovered around 50% since 2013 (see Figure 1).
To investigate how individuals have claimed or intend to claim their retirement benefits, my colleague JP Aubry interviewed 2,600 people between the ages of 57 and 70. Responses showed that while 60% of respondents have applied or intend to apply online (a slightly higher share than the SSA data), only 43% of respondents say completely online, i.e. without contacting the SSA in person or by telephone. Fitting the survey results to SSA data for online applications suggests that 37% of retirees apply entirely online (see Figure 2).
To better understand the factors associated with online complaint patterns, JP estimated a regression that relates respondent demographics to complete online complaints (see Figure 3). Two of the features most associated with claiming fully online are the use of online banking and turbo tax – both of which are proxies for a high level of comfort with online financial tools. Additionally, claiming to be fully online is associated with living in a metropolitan area, having a college education, and being married. On the other hand, the characteristics most associated with not claiming completely online are – essentially – being non-white.
In response to probing questions, respondents identified four reasons to contact an SSA representative: 1) complex matters that clearly require an SSA representative, such as discussing details of spousal and survivor benefits; 2) general aversions to online services, such as concern about data privacy; 3) simple requests that could be handled without contacting a representative, such as verifying benefit amount and eligibility; and 4) barriers to online claiming that could be addressed through SSA service improvements, such as correcting data errors.
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The survey suggests that implementing policy changes to remove barriers and make routine information more accessible (along with additional gains through greater online convenience among younger cohorts) could increase the share that claims to be fully online from about 20 percentage points to about 60%. While these gains are substantial, the survey suggests that a significant share of retirees are likely to still choose to contact the SSA in person or by telephone when claiming their benefits.