The public is slow to adopt online social security tools

A recent explosion of retiring baby boomers is placing new demands on the Social Security administration, and the agency is struggling to keep up.

Think of it as another supply chain disruption in the age of Covid. But instead of consumer goods being loaded onto container ships or factory orders on hold due to shortages of computer chips, this latest crisis is primarily the result of a shortage of staff.

“An explosion of retiring baby boomers is increasing demand for Social Security services at a time when budget constraints and retirements are limiting the agency’s ability to provide these services,” a new report from the Center for Retirement Research at Boston College.

The fact that Social Security offices remain closed to the public almost two years after the start of the Covid pandemic in March 2020 does not help matters.

“Despite SSA’s investment in potentially labour-saving tools, such as online benefit applications, the share of retirees applying for benefits online has hovered around 50% since 2013. “, indicates the report of the CRR.

SSA launched its first online application for pension claims in 2000. Although the monthly online application rate initially increased significantly after the introduction of this option, it has slowed considerably over the past decade.

To investigate recent and future trends in online applications, the CRR surveyed 2,600 people aged 57 to 70 about how they applied or intend to apply for their pension benefits and their communications with the SSA during the process. Although 60% of survey respondents have applied or intend to apply online, only 43% of respondents say they are fully online, that is, without contacting the SSA in person or by phone.

I understand. I am one of the minority of people who have started and completed my application for benefits online and have been successful. But when my husband tried to file a restricted claim for spousal benefits on my earnings file, we ran into a problem and ended up calling Social Security to follow up on the status of his claim. Obviously, we were not alone.

The CRR report found that the reasons given by respondents for contacting SSA representatives can be divided into four categories:
• complex issues that clearly require speaking to an SSA representative, such as discussing the specifics of spousal and survivor benefits;
• general aversions to online services, such as concern about data privacy;
• simple requests that could be handled without contacting a representative, such as verifying benefit amounts and eligibility;
• and barriers to online application that could be addressed through SSA service improvements, such as the correction of data errors.

The CRR report concluded that younger workers’ greater familiarity with online tools will lead to a gradual increase in the share of retirees claiming completely online in the future, increasing by around 10% over the next decade.

But bigger changes could come from implementing policies that help more retirees find answers to their basic inquiries online, such as verifying eligibility for benefits and tracking a submitted claim, according to the report. If these needs were handled by online services, rather than an SSA representative, the share of respondents who report being fully online would increase by about 15 percentage points.

“But even with changes in online convenience and new policies, a significant share of retirees will continue to contact the SSA in person or by phone when applying for benefits,” the report concludes.

While I applaud the SSA’s efforts to automate some of the application process, human interaction is still required when deciding when and how to claim benefits. Perhaps the SSA isn’t the best place to go for these answers, and financial advisors could help fill the void.

With 10,000 people turning 65 every day and workplace disruption caused by the Covid-19 pandemic, a record number of baby boomers have retired in the past two years. One of the first questions most clients ask when considering retirement is, “What should I do about Social Security?” Jeff Quigley, vice president of LifeYield, a fintech company that helps advisors maximize clients’ retirement income, told me in a recent interview.

“With over 2,700 rules, Social Security is a minefield unless counselors turn to technology to personalize answers to this question for each family,” Quigley said.

“Advisors can demonstrate the benefits of a personalized Social Security strategy, then have an in-depth conversation about accumulation and retirement income strategies,” he explained, adding that one of his colleagues jokingly refers to Social Security as saying the talks are the “gateway”. drug to financial planning.

Clearly, there is an ongoing need for advice when it comes to Social Security claims. Financial advisors who can help answer client questions about Social Security benefits will be well positioned to respond to the current wave of retirements.

[More: Social Security benefits checklist]

(Questions about the new Social Security rules? Find the answers in my 2021 ebook on

Melvin G. Rodriguez