Social Security's Quiet June Policy Change Will Put Retirees at Risk of Missing Benefits

For seniors whose retirement savings are stretched thin, Social Security is a critical source of income. In fact, 39% of seniors get all their income from Social Security, according to the Senior Citizens League. And another 19% get between 76% and 99% of their money from the benefits program.

For retirees who need this money for essentials like groceries and rent, missing even a single check could be a huge disaster. Unfortunately, in June, the Social Security Administration announced that it's quietly moving forward with an unpopular policy that puts retirees at serious risk of not getting the money they need.

Here's what Social Security said, along with details on why the policy change may be a huge problem.

Social Security confirms paper check deadline

According to the Social Security Administration's June announcement, it plans to implement a change required by federal law and Executive Order 14247.

Both federal law and the executive order require that all federal benefit payments be made electronically after September 30, 2025. While the Social Security Administration hasn't yet transitioned all beneficiaries to electronic payments, despite the instructions to do so, that's changing by the end of the year.

The June announcement was very clear: the "full transition" to electronic payments will be completed by the end of 2026.

Who could be most affected by the change

The change to Social Security's payment methods could be a huge problem not just for seniors but also for people who receive other types of Social Security benefits, such as Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI).

Unfortunately, elderly, sick, and low-income people receiving these benefits may not have bank accounts or be able to easily provide the Social Security Administration with updated details about where their electronic payments should be sent.

After the policy change was announced in July, advocates pushed back and warned that the most vulnerable beneficiaries were likely to miss some of their payments for various reasons.

This could happen because they weren't alerted to the change, didn't have the skills or ability to notify the Social Security Administration where to send their electronic payments, or didn't have the money to open a bank account.

Why Social Security says the change is necessary

Despite the potential risk to Social Security recipients of missing income, the Administration is pushing forward with the change anyway because:

• The executive order requires it.
• Paper checks are more likely to be lost, stolen, returned, or altered than electronic payments.
• There are cost savings associated with not sending paper checks, as sending a physical check is about 20 times more expensive than an automated payment.

While these reasons may be valid, the question is whether the advantages outweigh the potential consequences for vulnerable seniors and disabled individuals, who could face an interruption in their payments.

How to avoid missing your benefits

For most people who are already receiving their Social Security checks electronically, there's nothing to do as a result of this policy change.

For anyone receiving a paper check, it's important to act quickly before the switch to digital-only payments takes effect. The Social Security Administration recommends signing into your my Social Security account and adding your bank information, or asking your bank to send your direct deposit info to them so you are ready.

What if you don't have a bank account?

The Social Security Administration also has a solution for people without a bank account. The Direct Express® program allows payments to be delivered electronically via a prepaid debit card.

You'll still need to enroll in the program, though. You can do that by visiting GoDirect.gov or by calling 1-800-967-6857.

Those who truly cannot receive payments via digital means may also have the option to submit a waiver request to continue receiving paper checks, but there are no guarantees this will be permitted.

Bottom line

Keeping up with changes to Social Security's policies is really important. In fact, ignoring changes to Social Security rules is one of the biggest financial mistakes you could make in retirement.

This latest policy change may mean you need to provide your bank information ASAP so you don't miss out on any benefits you are counting on.

Other changes could also be coming down the pipeline, so check the Social Security Administration's websites regularly for news bulletins and keep up with general financial news so you can understand legal and regulatory changes as they arise.