The U.S. Department of the Treasury says a "historic change" is coming May 1, the retirement of paper Social Security checks. After May 1, anyone who applies for Social Security, Veterans Affairs (VA) or other federal benefits will have to choose an electronic payment method.
The move will affect millions of baby boomers and other retirees who are applying to receive their federal benefits. If you're already drawing those benefits, you have a little more time to switch over, however. Those people have until March 1, 2013 to switch to direct deposit. After that there will be no more paper checks.
The switch to electronic deposit is estimated to save taxpayers about $1 billion over the next 10 years, according to the Treasury.
In Alabama the Treasury sends out more than 250,000 Social Security or other supplemental checks per month. An additional 286,000 baby boomers will hit retirement age in the next 5 years. Savings in Alabama alone are expected to be nearly $3million annually.
Nationally, the Treasury is gearing up for the deluge of retirees that will flood the system in the next few years. 18 million baby boomers are nearing retirement age and the system will start adding some 10,000 eligible recipients to the Social Security rolls PER DAY.
Looking for places to cut costs, the Treasury says the move to direct deposit will save the system 92 cents per payment.
INFORMATION SOURCE: The U.S. Treasury