Big Social Security change coming, Jean Chatzky shares advice

A major change in Social Security benefits will take effect on Sept. 30.

In accordance with an executive order, federal benefit payments will primarily be issued electronically, with paper checks being phased out in most cases, the Social Security Administration (SSA) said.

To prevent any disruption in payments, beneficiaries who currently receive paper checks are being encouraged to switch to electronic payment options before the deadline.

Additionally, the temporary check option will no longer be offered when processing initial claims. Beneficiaries must select an electronic payment method during the application process.

Those requesting an exemption from the electronic payment requirement must file a waiver with the U.S. Treasury.

"Electronic payments offer significant advantages over paper checks, including faster access to funds, increased security, and greater convenience," said Nick Perrine, SSA chief communications officer, in a statement. "Payments are deposited directly into a bank account or onto a prepaid debit card, eliminating the need to wait for mail delivery or visit a bank."

Two ways to receive electronic Social Security monthly benefits

• Direct deposit to a checking or savings account is available for Social Security beneficiaries, who can use or sign up for a mySocialSecurity online account to manage deposit information and access benefit details, according to the SSA.
• The Direct Express Card is a prepaid debit card option for those without a bank account and is described by the SSA as a safe and convenient way to receive federal benefit payments.

Jean Chatzky explains when to collect Social Security

Social Security remains a cornerstone of retirement income for millions of Americans, yet its future is increasingly uncertain amid demographic shifts, rising costs, and legislative gridlock.

Regardless of the method by which one receives Social Security funds, one personal finance bestselling author offers general advice.

Jean Chatzky, former NBC "Today Show" financial editor and founder of HerMoney, offers pointed insights on how Americans should prepare for retirement — including her views on Social Security, 401(k) plans, and debt management.

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Jean Chatzky encourages individuals who are single and anticipate a long lifespan to think carefully about postponing their Social Security claims, ideally waiting until age 70 to maximize monthly benefits.

In the case of married couples, she recommends that the spouse with the higher earnings history delay claiming benefits, especially if one partner is likely to live well into older age.

She also observes that a significant number of Americans continue to work while receiving Social Security payments. For some, this is a financial necessity, while others choose to remain employed for personal fulfillment and social engagement.

Chatzky underscores the need to boost retirement savings through vehicles such as 401(k) plans and IRAs, helping to close the gap between current assets and future financial requirements.

She advises planning with the expectation of living to at least age 80, a guideline that reflects increasing longevity trends. While preparing for a retirement span of 15 to 20 years may add complexity to financial planning, it remains a critical step toward long-term economic security.

Jean Chatzky says carrying debt makes saving for retirement difficult

In her book “Money Rules,” Jean Chatzky identifies debt as a key obstacle that prevents many individuals from effectively saving and investing for retirement.

Carrying high levels of debt makes it harder to set aside funds for the future. Interest charges — especially those tied to credit card balances — can consume a substantial portion of monthly income.

Related: Jean Chatzky sends strong message on Medicare, Social Security

"In the U.S. alone, an estimated 115 million people have credit card debt," Chatzky wrote. "Of them, the average household is carrying $15,799."

Chatzky also shares what she calls a "bottom line" when it comes to managing debt and preparing for retirement. 

"Unless you’ve taken a look at the books, don’t assume to know anyone’s financial situation except your own," she wrote. "Make your lifestyle and purchasing decisions based on what you can afford, not what your peers are buying."

Related: Dave Ramsey has strong message on mortgage rates