The Social Security Administration Faces a Customer Service Crisis as Record Number of Americans Reach Age 65 During 2024

The Social Security Administration (SSA) performs a vital role in the lives of millions of Americans, including federal employees and retirees. The SSA provides essential benefits to retirees, disabled individuals, widows/widowers and other surviving family members including children and dependent parents. However, there are major challenges currently facing the SSA. How these challenges affect Social Security beneficiaries creates a pressing concern for disabled individuals, senior citizens, surviving family members of deceased Social Security beneficiaries and individuals approaching retirement in the next 5 to 10 years.

This column discusses the internal crisis currently existing within the SSA, specifically the need to have better customer service while serving the American public. This year could be the worst possible time to experience this predicament because the largest number of individuals in American history will turn age 65 during 2024. “Peak 65” as the expression indicates marks 2024 as the year when more Americans are turning age 65 than in any year in history. The new “65ers” number 12,000 per day during 2024 (a total 4.4 million in 2024), an increase from the 10,000 per day new 65ers that began the “Baby Boomer” trend in 2011.

The current SSA customer service problems can be traced back to budget disputes and austerity measures imposed by Congress. These budget disputes continue into 2024, with future SSA funding yet to be determined. There have been hiring freezes at the SSA and a considerable number of SSA employees have retired in recent years. Many employees are overworked and underpaid. Additional SSA funding could enable the SSA to hire and train more staff, invest in technology and infrastructure which would improve the overall service delivered.

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Former SSA Acting Commissioner Kilolo Kijakazi has said that the current workforce and customer service issues were years in the making. She has explained that training new employees in the complex Social Security rules takes more than a year. This may explain why erroneous advice and information is being put out so often among SSA customer service representatives.

Erroneous Information with Respect to the Social Security “Earnings” Test and the Widow Benefit

The following is an example of a federal employee who received erroneous information from an SSA customer service representative:

Janet, age 63, is a FERS annuitant who was widowed in June 2022. Janet visited a Social Security office in April 2023 to get information about collecting her late husband’s Social Security as a widow benefit. Janet retired from federal service on March 31, 2023. Since Janet was born in 1960, her full retirement age (FRA) is age 67. Therefore, Janet is younger than her FRA. As long as Janet is working full time and has “substantial” earned income” (salary/wages), she may have some Social Security benefits withheld due to violation of the “earnings test.” During Janet’s visit to the Social Security office in April 2023, the SSA customer service representative erroneously advised her to wait until 2024 to file for her benefits due to the salary she earned during January through March 2023. This was the first piece of erroneous information Janet received. This is because any salary earned prior to one’s retirement date is disregarded under the Social Security “earnings test” rule. The SSA customer service representative offered no advice and made no suggestions for Janet to receive any type of a Social Security monthly benefit – her benefit or her late husband’s (widow) benefit.

After visiting with her financial advisor, Janet had another plan. She would first file for her widow’s Social Security benefit to begin in June 2023, three months after she retired, and then switch to her larger Social Security benefit when she becomes age 70 in 2030. Janet made another appointment at her Social Security office to claim a widow’s benefit. A different Social Security customer service representative erroneously told Janet that if she remarries, she will lose her widow Social Security widow benefit. This is incorrect because a widow/widower who remarries after reaching age 60 does not lose his or her Social Security widow/widower benefit.

It is certainly possible that more knowledgeable and more experienced Social Security customer service representatives would have provided Janet with the correct answers to her questions. It is unfortunate that Janet’s story illustrates what has been happening with many Social Security customer service representatives. Better trained customer service is urgently needed.*

Frustration in Contacting the SSA

A second area of the SSA’s mounting customer service crisis is the frustration and hardship for retirees and other beneficiaries who have to wait a long time to talk to a customer service representative when they call the SSA’s toll-free line, 1-800-772-1213. The average hold time is 36 minutes, with many callers experiencing longer wait times. Long wait times on the phone can lead to extreme frustration and difficulty accessing necessary assistance and information.

Backlog in Social Security Disability Application Processing

A third area of frustration associated with the SSA is the substantial backlog in Social Security disability application processing. According to a recent report from AARP, as recently as the late 2010’s it typically took the SSA 110 to 120 days to process an initial application for disability benefits. By December 2023, the average wait was 228 days, twice as long. Historically, approval of requests for Social Security disability income benefits has been difficult to attain and continues to be the case. The latest statistics show that during 2022 only 35 percent of initial applications for SSDI were approved. Obtaining approval for Social Security disability benefits can be a lengthy process. In case an individual is initially turned down and files for a reconsideration, the AARP puts the average wait for a reconsideration by the SSA at seven months. After a failure at reconsideration, the average wait for a hearing before a Social Security administrator law judge is 15 months.

FERS employees who are considering applying for a FERS disability retirement must first apply for Social Security disability retirement. These FERS employees may be approved for a FERS disability retirement, but the entire approval process may take years.

The backlog in Social Security disability applications has resulted in many disabled individuals being kept in limbo as they await decisions on their eligibility for Social Security benefits. The backlog in applications adds to the overwhelming workload among SSA employees.

What Should Federal Employees and Retirees Do Given SSA’s Customer Service Problems?

Some observers contend that the SSA’s customer service problems are a result of budget disputes between several presidential administrations and Congress for many years. These budget disputes are continuing in 2024, with future SSA funding yet to be determined. Additional funding to the SSA could allow the SSA to hire and train more employees, invest in technology and infrastructures, thereby hopefully improving customer service.In the meantime, federal employees and retirees are advised to get educated and familiar with the rules associated with Social Security benefits available to them and to eligible family members. They should attend free seminars offered by community colleges and public libraries in many localities. These seminars are presented by financial professionals who are experts on Social Security benefits.

Federal employees and retirees can attend a webinar presented by the company Serving Those Who Serve entitled: “Understanding Your Social Security Benefits.” Attendees are able to ask questions during the webinar. There is no charge to attend. For more information and to sign-up, go to the web site. The next “Understanding Your Social Security Benefits” webinar will be held March 14, 2024.

*This case study is for illustrative purposes only. Individual cases will vary.

Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.