Q: I would like you to comment on the attached email. In it, you’ll see a photo that shows a waiting room in a typical Social Security office. I’ve seen similar scenes in my own local office. No wonder Social Security is in trouble if these kinds of people are ripping off the system!

A: Who are “these kinds of people”? To answer the question, let me describe the photo for the rest of my readers. Labeled “Our tax dollars at work: Social Security office waiting room — Austin, Texas,” the image shows a room full of chairs. Sitting in those chairs is a collection of mostly young to middle-aged people. Almost everyone in the picture is African-American or Hispanic. Above the picture is this question: “Do you see any gray or white haired retired folks?”

And this bit of vitriolic text accompanies the picture:

My friend went to his Social Security office to get a Medicare card. He took a picture of the waiting room. Please tell me if you can find a retired person in the place!!!! It’s called “disability” insurance!!!! You no longer have to wonder why Social Security is broke!!! These people do not pay into the system, nor are they disabled!!! Please spread this picture to everyone you know. Our country is going broke on this fraud!!! Please also go down to your Social Security office and take a picture and post it on the Internet. It just might wake up the country as to what is going on!!!

Gosh. Where and how do I begin to deal with this pile of Internet excrement? There’s so much I could point out that is absolutely idiotic.

Let’s start with one obvious point: I hope you realize how racist and xenophobic it is. The uninformed fool who posted this picture and text on the web never came out and said it, but instead of wondering where the gray-haired people were, he might as well have asked, “Do you see any white folks?”

And how about this whopper: “These people do not pay into the system, nor are they disabled!” How in the world can you tell all of that from looking at the picture? How can you tell that they haven’t worked and paid Social Security taxes? I guess it’s because they are “those people” — black and Hispanic. What other reason would the email sender have for saying that?

And how do we know they aren’t disabled? What do disabled people look like? Do they have to be wrapped head-to-toe in a body cast? Should they be lying on a hospital gurney? Or, once again, I have to wonder if maybe — just maybe — the email sender thinks they have to be white (and possibly using canes)!

And then there’s the implication that people get disability benefits without paying into the system.

That’s simply not true. To qualify for Social Security disability benefits, you must work and pay Social Security taxes, usually for a minimum of 10 years. Also, people who really know how the system works understand that it’s very difficult to qualify for Social Security disability benefits. In other words, you must be severely disabled before you receive monthly Social Security disability payments.

As I point out so often in this column, the Social Security Administration does manage a federal welfare program called Supplemental Security Income, or SSI. SSI is not a Social Security benefit and is not paid for out of Social Security taxes. To qualify for SSI, you must be over 65 or severely disabled, and you must be poor. So I guess there’s a chance that some of the folks in the picture are there to file for SSI benefits.

But I can tell you that most of the young and middle-aged people you see sitting in that waiting room in the picture are not there to file for Social Security or SSI disability benefits. They are there to replace a lost or missing Social Security card. How do I know? Because internal SSA studies show that about 80 percent of the people who come into a Social Security office are there to do just that. That’s the primary reason why you don’t see any “white-haired folks” in a Social Security waiting room.

So where are the old folks who need to do business with Social Security? They are sitting at home on the phone or at their computer. Most people who file for Social Security retirement benefits do so either online or by making an appointment for a phone interview. They rarely, if ever, have a need to visit a Social Security office.

Shame on the people who are spreading this vicious email!

Effective August 15, 2011, Social Security field offices nationwide will close to the public 30 minutes early each day.  For example, a field office that is usually open to the public Monday through Friday from 9 a.m. to 4 p.m. will close daily at 3:30 p.m.

“While agency employees will continue to work their regular hours, this shorter public window will allow us to complete face-to-face service with the visiting public without incurring the cost of overtime for our employees,” said Michael J. Astrue, Commissioner of Social Security.  “Congress provided our agency with nearly $1 billion less than the President requested for our budget this fiscal year, which makes it impossible for us to provide the amount of overtime needed to handle service to the public as we have in the past.”

Most Social Security services do not require a visit to an office.  For example, anyone wishing to apply for benefits, sign up for direct deposit, replace a Medicare card, obtain a proof of income letter or inform us of a change of address or telephone number may do so at www.socialsecurity.gov or by dialing our toll-free number: 1-800-772-1213 (TTY 1-800-325-0778).

The Social Security Administration has a page on their Web site dedicated to questions and answers about the electronic system. You can read all about it here. These are the first few questions and answers:

What is direct deposit?

Direct deposit delivers your Social Security or Supplemental Security Income (SSI) benefit into your bank, savings and loan or credit union’s account quickly and safely. The U.S. Treasury sends an electronic message to your bank, savings and loan or credit union crediting your account with the exact amount of your Social Security or SSI benefit. You can withdraw money, put some in savings or pay bills-the things you do with your money now. The difference is, your check isn’t printed or mailed.

Do I have to receive my benefits electronically?

Yes. Effective May 1, 2011, applicants filing for Social Security and Supplemental Security Income (SSI) benefit payments must choose either direct deposit or the Direct Express® debit card. Currently entitled beneficiaries and recipients receiving payment by check will have until March 1, 2013 to switch to direct deposit or the Direct Express® debit card. As of March 2011, 85 percent of all Social Security and SSI beneficiaries received their benefits by direct deposit. For more information, please visit the Department of the Treasury’s Go Direct® website http://www.godirect.org

I’m interested in receiving my benefits electronically. What should I do?

Here are three options:

If you have an account, go to your bank, savings and loan or credit union. They can answer your questions about direct deposit. If you don’t have an account, consider opening one and sign up for direct deposit at that time. Most banks, savings and loans and credit unions offer a variety of accounts, some with little or no fees. Look for one that meets your needs.

You can enroll in the Direct Express® Debit Card. It is a great alternative you can use to access your benefits. And you don’t need a bank account.

Consider opening a low-cost Electronic Transfer Account (ETA). This account costs no more than $3.00 per month, and you get at least four free cash withdrawals per month.

One of the most valuable pieces of mail from the federal government every year won’t be coming anymore.

It may not rank with an income-tax refund check, but the annual Social Security Statement arriving about three months before workers’ birthdays each year was a fabulous service. The statement was probably the single most important financial planning document most people ever received.

The Social Security Administration started mailing the statements in 1999 to everyone over the age of 25. The service was only 12 years old when the agency decided to cut costs by ending the automatic statements. As they say, the good die young.

The mailings stopped without advance notice. People with July birthdays and later won’t receive one this year. The agency stopped the statements despite not having them available online. It hopes to do so by the end of the year. Most people won’t bother to check anyway.

The Social Security website does have a retirement benefits estimator, but it does not have the range of information the yearly mailed statement contained.

The online estimator is a hassle. It’s not just entering your name and Social Security number. You must provide your mother’s maiden name, date of birth, place of birth and the previous year’s income. Most people wouldn’t know their previous year’s earnings, so they would have to look it up.

After all of that, the estimator provides only estimates of monthly retirement benefit amounts at age 62, 66 (67 for people born after 1960) and 70.

The mailed statement provided the benefit amounts, plus disability payment estimates and survivor benefits, if you died during the year. The mailed statement also contained earnings records, with incomes for every year of your career. If a mistake was made, you could correct it.

The Social Security Administration says that stopping the four-page statements will save the agency about $30 million in the current fiscal year and $60 million in 2012. Last year, the agency mailed statements to 152 million people. The mailed statements had been available by request since 1988, but the agency no longer takes requests.

The value of the statements to individuals goes beyond deciding whether to retire with early, full or delayed benefits. By seeing benefit amounts, individuals were reminded they will need other income sources in retirement. The statements were helpful nudges toward starting an individual retirement account or signing up for an employer-sponsored plan, such as a 401(k).

The Social Security Administration says it will consider mailing statements to people once they reach the age of 60. That will be too late for workers who should have started separate retirement accounts earlier in their career.

Retirement is now a matter of total individual responsibility. Everybody must plan their retirement income financially, and they also have to be persistent to dig up the information they need periodically to plan correctly.

This coming year inflation might be high enough to justify a COLA adjustment, but now there’s another problem — the cost of Medicare has risen so much that Medicare premiums might increase also. The net effect could be that the COLA is offset by the Medicare premiums, resulting in no change for beneficiaries.

Fortunately, there is a provision in the law that prevents benefits from being reduced due an increase in Medicare premiums.

This development was written up in detail in a recent article at NPR.org. Here are excerpts from that article:

About 45 million people — 1 in 7 in the country — receive both Medicare and Social Security. By law, beneficiaries have their Medicare Part B premiums, which cover doctor visits, deducted from their Social Security payments each month.

David Certner of AARP estimates that as many as three-fourths of beneficiaries will have their entire Social Security increase swallowed by rising Medicare premiums next year.

It’s a tough development for retirees who lost much of their savings when the stock market collapsed, who lost value in their homes when the housing market crashed and who can’t find work because the job market is weak or they are in poor health.

Medicare premiums are absorbing a growing share of Social Security benefits, leaving retired and disabled people with less money for other expenses, according to a report by the Congressional Research Service.

Social Security recipients spend, on average, 9 percent of their benefits on Medicare Part B premiums, plus 3 percent on premiums for the Medicare prescription drug program. By 2078, people just retiring would spend nearly one-third of their benefits on premiums for both Medicare programs, the report said. Also, when premiums for the prescription drug program increase, as they do almost every year, they can result in a pay cut for Social Security recipients.

“We could very well be entering a period where we’re all stuck with flat benefits because of the growth in health care costs,” said Mary Johnson, a policy analyst at The Senior Citizens League.

By law, Social Security cost-of-living adjustments, or COLAs, are determined each year by a government measure of inflation. When consumer prices go up, payments go up. When consumer prices fall, payments stay flat until prices rebound

There had been a COLA every year from 1975 through 2009, when a spike in energy prices resulted in a 5.8 percent increase, the largest in 27 years. Since then, the recession has depressed consumer prices, resulting in no COLA in 2010 or 2011.

Older people might feel they are falling behind because they haven’t had a raise since 2009, but many are benefiting, said Andrew Biggs, a former deputy commissioner of the Social Security Administration who is now a resident scholar at the American Enterprise Institute.

Consumer prices dropped, but Social Security benefits didn’t drop, Biggs said. At the same time, health care costs went up, but Part B premiums stayed the same for most beneficiaries.

“They are better off because of that,” Biggs said. “Somebody else is paying for a greater share of their health care. This will get me hate mail, obviously. But it is what it is.”

Next year, the trustees who oversee Social Security project a 1.2 percent COLA. President Barack Obama, in his spending proposal for the budget year that begins Oct. 1, projects a COLA of 0.9 percent. The average monthly payment is $1,077, so either way, the typical increase is projected to be between $10 and $13.

The current spike in energy prices could boost next year’s COLA, if it lasts through September, when the increase for 2012 will be calculated. The COLA will be announced in mid-October.

Medicare Part B premiums must be set each year to cover 25 percent of program costs. By law, they have been frozen at 2009 levels for about 75 percent of beneficiaries because there has been no increase in Social Security. That means the entire premium hike has been borne by the remaining 25 percent, which includes new enrollees, high-income families and low-income beneficiaries who have their premiums paid by Medicaid, the federal-state health care program for the poor.

The 2009 premium levels, which are still paid by about three-fourths of beneficiaries, are $96.40 a month. Most of those who enrolled in the program in 2010 pay $110.50 a month and most of those who enrolled in 2011 pay $115.40.

The Medicare trustees project a Part B premium of $113.80 a month for next year. Obama’s budget projects a monthly premium of $108.20, said Donald McLeod, a spokesman for the Centers for Medicare and Medicaid Services. McLeod cautioned that the projections could change significantly by September, when 2012 premiums are calculated.

Under either projection, a small share of beneficiaries would get lower premiums. The vast majority would get higher premiums that could swallow their Social Security COLA.

The tax bill signed into law in December 2010, the “Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010,” included a one-year reduction in the FICA payroll tax paid by employees from 6.2 percent to 4.2 percent. This reduction is in effect for 2011 only and any change would require another statutory change. Unless there is a change in the law, the employee’s tax rate will revert back to 6.2 percent in 2012. (Note that the employers’ 6.2 percent tax was not reduced.) About 159 million workers will be affected by this payroll tax reduction. It is estimated that the average increase in paychecks will be about $695 per worker for the year.

Questions have been raised regarding the impact of the payroll tax reduction on the Social Security Trust Funds. According to the law, there will be no affect on the Trust Funds or benefit payments. Worker’s benefits will be calculated without regard to the tax reduction and the Social Security Trust Fund will be made whole by specific appropriations from the General Fund. SSA’s Chief Actuary wrote that the projected level of the Social Security Trust fund would be unaffected by the payroll tax cut.

Michael J. Astrue, Commissioner of Social Security, announced that the agency’s most popular online service – the Retirement Estimator – is now available in Spanish at www.segurosocial.gov/calculador.  The Retirement Estimator uses a person’s own Social Security earnings record to provide immediate and personalized benefit estimates.  To publicize the website and the new Spanish-language service, Social Security has enlisted the help of the widely popular and well-respected host of Sabado Gigante, Don Francisco.

The actual rule is a bit complicated: the COLA is determined by comparing the change in the Consumer Price Index (CPI-W) from the third quarter of 2008, the last year that a COLA was determined, to the third quarter of 2010. There was no increase in that period. This is in contrast to the change from 2008 to 2009, which was 5.8 percent, the largest increase since 1982.

The Social Security Administration has issued a press release about the lack of increase, and a fact sheet listing the amounts of each type of benefit available through Social Security. Here is the text of the press release:

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 58 million Americans will not automatically increase in 2011.

The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a cost-of-living adjustment (COLA) was determined to the third quarter of the current year.  As determined by the Bureau of Labor Statistics, there is no increase in the CPI-W from the third quarter of 2008, the last year a COLA was determined, to the third quarter of 2010, therefore, under existing law, there can be no COLA in 2011.

Other changes that would normally take effect based on changes in the national average wage index also will not take effect in January 2011.  Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax as well as the retirement earnings test exempt amounts.  These amounts will remain unchanged in 2011.  The attached fact sheet provides more information on 2011 Social Security and SSI changes.

Information about Medicare changes for 2011, when available, will be found at www.Medicare.gov.  The Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2011.  Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects more than 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit.  Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2011.  In addition, almost 20 percent of beneficiaries have their Medicare Part B premiums paid by state medical assistance programs and thus will see no change in their Social Security benefit.  The state will be required to pay any Medicare Part B premium increase.

For additional information about the 2011 COLA, go to www.socialsecurity.gov/cola.

For additional information about changes in the national average wage index, go to www.socialsecurity.gov/OACT/COLA/AWI.html.