Sometime in the next 12 months, most working Americans will be mailed a personal Social Security statement. Give it a look. You'll learn much more about the program than you probably know now. It also should make you more thoughtful about your financial planning.
But the statements can be misunderstood. They might be misused by people who'd like to abolish Social Security, to try to undermine the program's public support.
On Oct. 1, Social Security started mailing 500,000 personal statements per day. They will go to 125 million workers 25 and older. You should get yours about three months before your birth month. A new one will arrive each year.
The statements estimate what your retirement benefits might be at three different ages: 62 (the earliest you can collect), your full Social Security retirement age (65 to 67, depending on when you were born) and 70. The later you retire, the bigger your benefit.
You're also told what the government would pay you, each month, if you became seriously disabled (as three out of 10 young Americans are likely to be). There are other estimates for what your spouse and children might receive if you die young.
One thing may confuse you. These estimates assume that you earn your current income for the rest of your life. That may work, if you're 55 and on a job plateau. If you're 28, however, the benefits may look too small to take seriously.
Young people are the most skeptical of Social Security's worth. Many say, casually, "It won't be there when I retire." But it will be, unless you decide to vote it out.
Young people also are the most inclined to think that stocks were created to make them rich. "These personal statements are going to be the end of Social Security," one financial salesman gleefully told me six months ago. "When people see how little they're going to get, they'll want to put their money somewhere else."
But maybe not. These statements also make Social Security very real. It's one thing to say "It won't be there" when you're young and retirement is just a word. It's quite another to hold a statement of personal benefits in your hand.
The statement does say, "If your earnings increase or decrease, your benefit may change accordingly." Young people should translate that as "When you earn more, Social Security will pay you more." You build a higher retirement benefit over your lifetime.
On request, Social Security will prepare a free, customized projection, assuming that your income is higher (or lower) than it is today. Call 1-800-772-1213 or go to www.ssa.gov. The projection takes about three weeks.
For the young, the program's other benefits are potentially huge. If you become disabled, you might get a check for the rest of your life. If you die while supporting a family, your spouse and children can rely on many years of income support.
You get all this, even though you paid into the system for only a short period of time.
Financial planners generally call the new statements a wonderful idea. "They'll be especially good for women, to help them pay attention to their retirement planning," says Peg Downey of Money Plans in Silver Spring.
"We hope it will be a wake-up call for younger workers to put more money aside and do more financial planning," says Social Security Commissioner Kenneth Apfel.
The statement lists estimated benefits in "current dollars," the dollars of today. If you're told you'll get $1,500 a month when you retire in 20 years, that means your payment (whatever its size) will buy what you know $1,500 buys today.
One other valuable thing: The statement shows your lifetime earnings record, on which your benefits are based. That makes it easy to check your record every year, to be sure it's right.