Laurence Kotlikoff, Is Social Security Being Hacked? The Wildly Incorrect Social Security Benefit Statement Mystery

29 Jun 2019 | Larry Kotlikoff, Media

Three days ago, I posted a column showing that Social Security is mailing out wildly incorrect benefit statements. I say statements because I presume if the Social Security computer produced one crazy benefit statement, it produced a slew. The column discusses one bizarre statement, copying the relevant part.

The statement tells the worker that if she retires at age 66, she will receive the monthly benefit she would actually receive only if she waits until age 70. It also tells her that if she retires at age 62, she’ll get the benefit that would actually be paid only if she waits until age 66.

Benefit statements like this could cause people to make major mistakes in deciding when to retire and how much to save before retiring.

For example, if the worker relied on this information, she would have expected a monthly benefit of $1,037 if she retired at age 62 but would actually have received only $782. And, if she planned to retire at her full retirement age 66 and four months, she would have expected a benefit of $1,372 only to learn that her monthly check was only $1,061.

I called Social Security’s press office in the afternoon of 6/25/2019, when I wrote my column, to get Social Security’s reaction. They said they’d get back in touch. I heard nothing that day, nothing the following day, and nothing the day after that. I’ve called the office each day and learned that they are still working on the issue. I also heard from a senior official that a team has been assigned to study what happened. No one from Social Security has asked for any specifics about the person involved, including the date of the receipt of the statement.

This lack of information, the time lapse, the failure to ask about the person involved and the timing, and news of the team being assigned provides lots of information. It suggests six things. First, no one in Social Security has heard of this problem before or, if they have, they aren’t saying. Second, the problem probably isn’t widespread. Third, there is no immediate explanation or none Social Security wants to make public. Fourth, a team of people must be looking at code updates over long periods of time. Otherwise, they’d want to know when the statement was mailed. So the team must be worried this has happened more than once in the past. Fifth, this is core code — code that no one would ever be told to change. Hence, the team must be investigating everyone, including themselves, who had access to this core code as well as looking at the chance that someone hacked into Social Security’s computer system, perhaps on a few occasions to see if doing so was possible. Sixth, the hacker, if there was or is one, may be sending a message to Social Security by temporarily changing its code to produce one or several crazy benefit statements and then restoring the code to its former self. The message being sent? Social Security’s computer systems aren’t secure or We can screw up your country’s retirement system big time in short order.

My advice to households: print out your Social Security covered earnings history and keep it in a safe place. But also double check that it’s correct.

My advice to Social Security: print out all workers and current beneficiaries’ covered earnings histories and keep them in a safe place.

Stay tuned for the resolution of the Great Social Security Wildly Incorrect Benefit Statement Mystery. I’ll let you know what happened as soon as I learn.

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John C. Goodman is President of the Goodman Institute and Senior Fellow at The Independent Institute. His books include the soon-to-be-published updated edition of Priceless: Curing the Healthcare Crisis, the widely acclaimed A Better Choice: Healthcare Solutions for America, and New Way to Care: Social Protections that Put Families First. The Wall Street Journal and National Journal, among other media, have called him the “Father of Health Savings Accounts.”