Social Security will stop sending paper checks soon (Sept. 30). How to make sure you still get your benefits on time.👇
In 2023, 4.2% of all U.S. households, or about 5.6 million households, were unbanked or lacked bank accounts, according to the Federal Deposit Insurance Corp. The reasons cited for not having a bank account included a lack of trust in banks, not having enough money to meet account minimums, account fees and concerns about privacy, according to the FDIC.
Those who lack bank accounts were more likely to be lower-income households; less educated households; Black, Hispanic, and American Indian or Alaska Native households; working-age households with a disability; and single-parent households, the FDIC said.
How to make the switch
The Social Security Administration has requested that beneficiaries create or update their online accounts to provide direct-deposit information; call the agency at 800-772-1213; or make an appointment at a local field office.
Even those with bank accounts may struggle with electronic payments. Only 19.3% of households age 65 or older used mobile banking as their primary source of banking, according to the FDIC.
"This will be difficult for those who don't have internet access," Johnson said. "It may lead to delays. I suspect a few Social Security recipients could potentially lose access to their benefits altogether, at least temporarily, unless they take the right steps quickly.
"Even simple banking can become a challenge when there may be memory and cognitive issues," Johnson added. "I don't believe the perfect option really exists on this - especially for seniors with intellectual challenges who are home alone. Online banking can be an obstacle for the cognitively disabled and blind, [and] those who can't afford a smartphone or the internet fees."
Beneficiaries without a bank account can get a prepaid debit card for their Social Security benefit payments. With the Direct Express card program, the federal benefit payment directly deposits onto a debit card that can be used to make purchases, pay bills or get cash.
In extremely rare circumstances, the Treasury Department may grant exceptions to the electronic-payment mandate, according to the Social Security Administration. To request a waiver, call the Treasury Department at 855-290-1545.
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