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Social Security checks retire

By Jennie L. Phipps ·
Wednesday, April 27, 2011
Posted: 4 pm ET

Beginning May 1, Social Security will require all new recipients to get their payments by either direct deposit to a bank account or via a debit card. Recipients who are already receiving Social Security have until May 1, 2013, to convert to one of these electronic delivery systems.

Cutting out paper checks and postal delivery is expected to save the agency $120 million in the first year and a total of $1 billion over 10 years, which is a good thing for taxpayers, especially people living in retirement.

Walt Henderson, director of EFT strategy division for the Treasury Department, says you can make the switch online or over the phone.

  • Go to the website (It's not a .gov site because it's owned jointly by the Treasury Department and the Federal Reserve).
  • Call toll-free -- (800) 333-1795. To prove who you are, be prepared to tell the person answering the phone the check number of your latest check and its amount.

In either case, if you are choosing direct deposit, you'll need to know your bank's routing number and your account number. Generally, both are across the bottom of your checks with the routing number on the left and the check number on the right.

Direct deposit is free, and Henderson emphasizes that the Treasury is marking Social Security funds clearly so banks know that these funds can't be garnished under most circumstances (child support and student loan payments are exceptions). "This rule really protects electronic payments and encourages people who are less likely to sign up for electronic payment to do so," Henderson says.

If you aren't a customer of a bank, you can choose a debit card that Social Security calls Direct Express. The card gives you one free withdrawal per month from a network of ATMs. The list is on the website --  search by ZIP code. Subsequent monthly withdrawals cost 90 cents, but you can use the card for purchases and get cash with those transactions for no additional charge.

If you lose the Direct Express card, the government will replace it for free -- once each year.  If you lose more than one card a year, replacements cost $4 with additional charges for overnight mailing if you need that convenience. These debit cards have slightly better protection than other kinds of debit cards. You'll be protected from losing money if you report the loss of the card within 90 days as opposed to 60 days for most cards.

Here, for your retirement planning pleasure, is the time table for getting paid:

  • Social Security payments -- Long-time recipients still get paid on the third day of every month. More recent recipients are paid based on the Wednesday closest to their birthdays. For instance, if your birthday is the 25th of the month, you get your Social Security on the last Wednesday of the month.
  • Veterans Administration, railroad retirees, retired federal employees and recipients of Supplemental Security Income, or SSI -- All are paid a minute after midnight on the first day of every month.
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May 21, 2011 at 11:19 pm

The increase in bank charges to SS recipients is a decrease in payment any way you look at it. Will the card let the person roll the money into a caretaker's account or let the direct deposit be made to an account that doesn't have the SS recipient's name on it if that person is not mentally stable or gives permission? I hope so because there are many people who need that set up.

May 11, 2011 at 8:35 pm

Bernice - the laws change - go to SS office and they should have the info, they have been very helpful.

BTW the problem with this scheme is that cash w/d have to be made through an ATm in most cases, and that can involve fees. We have what we call an atm cash account. We deposit a check every few mos in the ATM accout, use it up, and then add more money.

But beware of the banks that will find a hundred ways to scam you. The same people who destroyed our ecnomony on wall street.

Its almost like you need to be a lawyer and accountant to avoid getting ripped off.

Thank the repubs - $15 trillion of family net worth destroyed on wall street by the big banks. enough to pay off the whole nations national debt.

Repubs - you gotta love them for their nerve

May 10, 2011 at 6:39 pm

Berniece: The limit for 2011 is $14,160. Half of what you earn over that amount will be deducted from your benefits. You should notify SSA of what you expect to make at the beginning of each year, this is known as a work notice. In the year that you turn your full retirement age of 66, the limit is $37,680. After your 66th birthday there is no limit and benefits are no longer subject to deductions for work.

Berniece Neisen
April 28, 2011 at 6:35 pm

I have been drawing my late husband's social security and have remarried and also am turning 65 on June 25, so I am retiring from my job, but just wondering how much money I can make and still draw my late husband social security for this year before I start drawing my own in June. I din't worry how much it was when I was working but now that I going to quit I was just wondering. I have heard it was 13000.00 but I really don't know.