How Identity Theft Can Hurt Your Retirement

As life becomes more complicated, the sophistication of frauds and crime also keep pace. In a world where our belongings and benefits are closely linked with our identity, it is the identity itself that is being threatened. The cases of identity theft are not just a matter of concern. They are also a call for future planners and policy makers.
How Identity Theft Can Hurt Your Retirement
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The Importance of Identity

Social security benefits in United States are linked with the identity of the beneficiary, which in turn is linked with the social security number. If somebody else makes a claim for the social security benefits in your name, and is able to somehow claim them from the Social security administration, it can create hurdles when you make a claim for those benefits.

The social security benefits are designed and administered in a manner that leaves certain loopholes for such an identity theft.

Loopholes in Social Security Design for Identity Theft

The dangers to identity theft and misuse arose largely from

some of the apparent loopholes in the mechanism for delivering social security. As these loopholes are gradually taken care of, the cases of identity theft are expected to fall too.

(i) Lack of Adequate Biometric Identifiers

As of now the primary identifier for a person’s Social Security benefit claim is the Social Security number, used along with other details like name, date of birth, and other personal information, all of which can be obtained by a defrauder planning an identity theft. This is one of the primary reasons why certain persons are able to get away with this crime.

(ii) Difference between Earliest Age of Claiming ‘Reduced’ Benefits and the Age of ‘Full’ Benefits

The Social Security retirement benefits can be claimed at the earliest, on attaining the age of 62 years. However, at 62 years, the retirement benefits available will be less than the full benefits available. The full benefits become available at a later age between 65 to 57 years depending upon your date of birth. This means that in case you are planning to claim your full retirement benefits at an age of 66 years, then it is possible that someone may claim your benefits once you are 62 years and you may come to know about it only when you make an application four years later. This scheme makes the job of the defrauder convenient.

(iii) Wide Eligibility of Survivor Benefits

Survivor benefits are available to a number of persons related to the deceased, making it possible for an imposter to claim the

identity of an existent or non-existent family member and claim the benefits at a time when the real deserving beneficiaries may not be claiming it, and thereby getting away with the crime for a considerable period.

All these possibilities can it difficult for you to claim the benefits due to you legally.

Consequences of Identity Theft

(i) Delay & Difficulty in Claiming the Benefit

If someone has already being claiming ‘your’ Social Security benefits for some time when you apply for the same, then you will obviously be faced with obstacles of having to establish and prove your identity. Presuming that you are able to establish your genuine identity, the Social Security administration will still want to make doubly sure that you are the original. The result could be a delay and difficulty in realization of claim. In some cases, if do not possess all the documents, you may have to face substantial hurdles before you actually get your claim.

(ii) Charges of Crime, Defraud and Problems in Credit-Worthiness

The other major consequence that you may have to face because of the theft of identity and its misuse is to face investigators from different agencies who come across your Social Security number in their investigation of a crime, and who may then approach you with the evidence they have. Though in all likelihood, you may not face any substantial legal problem, yet it could be an irritating and embarrassing experience that may leave a scar on your psyche. Sometimes, it can also delay your benefits.

To avoid all these complications, it is always worth it to take all due precautions to protect your Social Security number.

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