Retire the Check: By the Numbers

"Retiring" the Paper Social Security Check for New Enrollees:
By the Numbers

• The U.S. Department of the Treasury is "retiring" the paper Social Security check option for millions of baby boomers and others applying for federal benefits. According to the Treasury Department, this move will save more than $1 billion over the next 10 years, as American taxpayers will no longer incur the annual $120 million price tag associated with paper checks. (It costs 92 cents more to issue a payment by paper check than by direct deposit.)
• More than 18 million baby boomers are expected to reach retirement ageⁱ during the next five years, according to U.S. Census Bureau 2009 American Community Survey data.
• Approximately 10,000 people each day are expected to become eligible for Social Security benefits, according to the Social Security Administration.
• California, Texas, New York and Florida are the states expected to have the highest number of baby boomers reaching retirementⁱⁱ age over the next 10 years, according to U.S. Census Bureau 2009 American Community Survey data:
  • California: More than 4.3 million
  • Texas: More than 2.7 million
  • New York: More than 2.5 million
  • Florida: More than 2.3 million
• On January 31, 1940, Ida Mae Fuller received the first monthly Social Security benefit check and, to date, about 165 million people have received Social Security benefits. (Source: Social Security Administration)
• Approximately eight in 10 federal benefit recipients already receive their Social Security or other federal benefit payment electronically. And according to 2009 Treasury Department research, 96 percent of Americans who use direct deposit report having a positive experience.
• Electronic payments are safer than paper checks. More than 540,000 Social Security and Supplemental Security Income paper checks were reported lost or stolen in fiscal year 2010 and had to be replaced. And $93 million-worth of Treasury-issued checks were fraudulently endorsed in 2010. (Source: Treasury Department)
• According to the 2010 Federal Reserve Payments Study, electronic payments now make up over three-quarters of all noncash payments nationwide. There were 5.7 billion fewer checks written in 2009 than in 2006, a decline of 6.1 percent per year – while electronic payments grew 9.3 percent during that same period.

Treasury's All-Electronic Federal Benefit Payments Rule:
Key Deadlines

• People newly applying for federal benefits on or after May 1, 2011, must choose an electronic payment option at the time they sign up for their benefits. If they wish to direct their money into a bank or credit union account, they should have the following information on hand when they apply for their benefits:
  • Financial institution's routing transit number (often found on a personal check)
  • Account type – checking or saving
  • Account number (often found on a personal check)
  People who prefer receiving their payments on a prepaid debit card or who do not have an account at a financial institution can receive a Direct Express^® Debit MasterCard^® card.
• People currently receiving benefit payments by paper check must switch to electronic payments before March 1, 2013. Switching from checks to direct deposit is fast, easy and free at www.GoDirect.org, by calling the U.S. Treasury Electronic Payment Solution Center at (800) 333-1795, or by speaking with a bank or credit union representative.
• People who do not choose an electronic payment option by March 1, 2013, or at the time they apply for federal benefits, will receive their payments via the Direct Express^® card so they will not experience any interruption in payment.
• People who are already receiving federal benefit payments electronically do not need to take action.

¹ Calculated using age 62 as the age for initial eligibility. (SOURCE: Social Security Administration benefits calculator for anyone turning 62 over the next 10 years).