Retiring baby boomers are increasing the demand for Social Security Administration (SSA) services at a time when budget constraints and retiring staff are limiting its capacity to deliver these services. In theory, investing in web-based tools that people can use to serve themselves could help SSA meet the projected increases in demand, even with fewer staff. But, despite investments in tools with significant labor-saving potential, such as online benefit application, the share of retirees applying for benefits online has hovered around 50 percent since 2013.
This study of online claiming is based on a survey of older individuals who either claimed their Old Age and Survivor (OASI) benefit in the past five years or intend to claim within the next five years. The survey covered: 1) how they submitted (or intend to submit) their benefit application; and 2) how they communicated (or intend to communicate) with SSA during the process.
The survey found that:
- About 60 percent of respondents submit (or intend to submit) their benefit application online, but only 43 percent claim (or intend to claim) benefits completely online – that is, claim benefits without interacting with an SSA representative by phone or in-person during the process.
- Reasons for contacting SSA rep during the claiming process included 1) distrust of online tools and a preference for in-person interactions, 2) obstacles to using SSA’s online services – such as data errors or a general lack of awareness of SSA’s online tools, 3) straightforward inquiries about benefits – most of which could probably be handled online, and 4) more complex inquiries regarding things like spousal benefits or the tax implications of receiving SS income.
- In general, younger respondents were more likely to exhibit a high comfortability with online financial services.
The policy implications of the findings are:
- Only 70 percent of the roughly 50 percent currently submitting online benefit applications – about 35 percent of retirees – claim completely online.
- The share of retirees who claim completely online could be increased significantly through policies that 1) help more retirees find answers to their basic inquiries online and 2) reduce the impediments retirees encounter when they do try to use SSA’s online tools.
- These policies, combined with the incremental impact from greater comfort with online services among younger cohorts, could increase the share of retirees claiming completely online by about 20 percentage points in ten years.