Timing of Social Security Checks is Key

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It’s a simple concept. Deposit retirees’ Social Security checks right before their big-ticket bills come, especially rent.

The U.S. Social Security Administration’s current schedule for depositing pension checks in bank accounts is based on each retiree’s birth date– it can be the second, third, or fourth Wednesday of each month.

The problem is that cash-strapped, low-income seniors receiving the earlier checks, on the second or third Wednesdays, can fall into a common behavioral trap: they spend the money soon after it comes in and then can’t cover the rent, mortgages or credit cards due at the beginning of the following month.

According to a clever new study, people who get these early monthly checks are at greater risk of resorting to desperate measures like payday loans than are seniors receiving them on the fourth Wednesday.

Such measures of financial distress are occurring “even though the pay schedule is known in advance,” write researchers Brian Baugh and Jialan Wang.

The advantage of Social Security deposits made on the fourth Wednesday is that retirees can get the big expenses out of the way first, forcing them to make do for the rest of the month with the money they have left. Indeed, people with fourth-Wednesday deposits had fewer bounced checks, account overdrafts, and payday loans, the researchers found.

They concluded this after first tracking the Social Security deposits flowing into some 34,000 bank accounts and the recurring payments flowing out – groceries, gas, retail, and other charges.  It was impractical to track rent payments, typically low-income retirees’ largest expense, because rent usually is paid with a personal check to a landlord, who is unidentifiable in a bank account. As a proxy for rent, the researchers tracked mortgage payments.

A partial explanation for what might be happening is that seniors whose Social Security deposits and bill due dates are mismatched will concentrate their spending early in the month, because the check is burning a hole in their pocket.

And for good reason: low-income people constantly make impossible choices. Do they forgo a trip to the grocery store to pay a medical bill? Can they afford a gift so that a grandson can attend a birthday party, or should he be told he can’t go?

The researchers suggest that new policies and technologies that align income with spending would help retirees.

One such policy might be to move all Social Security deposits to just before the largest bills are due. This wouldn’t give financially vulnerable retirees any more money. But it might give them better odds of budgeting their money well.

The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement Research Consortium. The opinions and conclusions expressed are solely those of the author(s) and do not represent the opinions or policy of SSA or any agency of the federal government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.


I hope that not a lot of resources were expended on this study, as it is a misguided concept. It is true that low income people sometimes have to make difficult choices , but they can also be irresponsible and not very conscientious.

My widowed mother managed to pay the rent when due, although there were times a utility bill was paid unavoidably late. We were not just low income, we were very poor because of circumstances beyond our control. There was never any money for anything but the very basics and there were times even they were lacking. We did without because we had to. And, of course, there was pride.

Today’s low income people have a plethora of benefits they can avail themselves of and can live decently, if they live within their means. Rental assistance, heat energy assistance, lifeline program for internet and telephone service, free cell phones and free health care and nutritional programs. These were benefits that were unheard of when I was growing up. The few benefits we did get were heavily regulated.

A person can do all the right things and still wind up behind the eight ball. Life isn’t always fair. This does not excuse them from spending their resources irresponsibly, even if they are meager.

Changing the date of the Social Security payments will not change a person’s behavior. A wise person said, people don’t change, they just become more so. This remains true.


    People do not resist change, they resist being changed.

chester marx

I think that our government has no interest in the welfare of their low income voters. This is a great idea, it’s surprising that it hasn’t been put into action. As to Marjorie’s reply, not all low income folks have “bad behavior” to blame for their circumstances. And having been poor, finding those benefits can be both time/cash consuming to find.


    You said bad behavior. Not I. Low income people are just as prone to inadequacies as the general population. I include people of all income groups. Character flaws are not indigenous to low income people.

    As to your claim about benefits being. difficult to find, all you need do is visit your local library and they will help you find those resources, or call your local office on aging. I could mention several other options as well. You can’t expect someone to knock on your door.

    Your defenses are weak. God helps those who help themselves.

Joyce Lash

Research states that, as we age, our capacity to manage finances diminishes. The system of paying Social Security benefits is one of the more complicated ways to ask someone to manage bill payments. Payments can be received with a full week variance, so setting up auto-payments can be tricky. The lower retirement income is, the more likely difficulties can occur. A more appropriate study might have compared the current rolling payment date to a set date occurring on the 28th of the month. While evidence from this study shows payments near the end of the month are favorable, the results point to financial management skills as the flaw. Comments, and I would agree, indicate those are unfair assumptions.


If the timing for receipt of a check can have an impact, let’s implement that. Anything that might help. But often times we see that lower income means individuals have the latest cell phone, designer duds and money for alcohol or gratification items.

Joyce Lash

Just read the longer study and an apology is in order to the researchers. It does include data showing difficulties with a moving date for deposit. It also gives the income levels of single individuals who were tracked. Not necessarily low income. I’d recommend reading the research and hope the SSA is paying attention.


Maybe we could just have SS send the money to their creditors and leave any choice out of the loop.

Donald Mayfield

It takes a lot of work to schedule income and expenses and do budgets. I learned the hard way. I do it now.


    Kudos to you. You said it all in two sentences. At least you learned..some never do.

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