Articles
| 01 September 2010
Sometimes things are just too good to be true. We have been talking with our retired clients recently about paying back Social Security benefits – interest and penalty free - that they may have started when they were 62 and starting over again now that they are 66 (or later). There is also a tax benefit to doing this (credit or deduction, but that is for the accountants to discuss with you). This reset can increase benefits approximately 6% for every year between 62 and 66, and 8% per year between age 66 and 70. In a market where returns have been negative and cash is paying next to nothing, this is a great opportunity. This is such a good opportunity that Social Security is proposing to change this rule.
Under the proposed change, Social Security would allow you to pay back your benefits only once in your lifetime and only within 12 months of when you first started. This 12-month limit would prevent most people from resetting their benefits, especially with the hindsight of a weak stock market like we have had over the last decade.





