Social Security numbers are a key part of your financial identity, and identity thieves often do huge amounts of damage by obtaining Social Security number data. But does it have to be that way?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at ways to make Social Security identity theft less of an issue. Dan notes that Social Security numbers are directly relevant only in two situations: reporting eligible wages to the Social Security Administration and receiving benefits. He points out that even though the IRS, financial institutions, and countless other businesses collect people's Social Security numbers, there's no reason they couldn't use alternative identification methods, such as driver's license numbers or tax identification numbers similar to those that corporations use. Doing so would force you to keep track of more ID numbers, but it would also mean that losing any one of those numbers would have fewer consequences on your finances.

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Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.