Scott Burns: The Risk of Delaying SS

[MJ]

There is the option (with it still is available) to begin collecting at 62 (or later) then 3 years later, return the money to SSA and start collecting for real at 66. In the mean time, you had use of the "your" money. Of course, you would want to amend your tax returns for the last 3 years to get back any taxes you may have paid for your SS payments.

So far, I don't believe anyone here has tried this yet.

MJ

 

[cute fuzzy bunny]

Apparently you dont even have to amend your taxes. Theres a place on the return to do it all as a credit in one year.

 

[JohnEyles]

There is the option (with it still is available) to begin collecting at 62 (or later) then 3 years later, return the money to SSA and start collecting for real at 66. In the mean time, you had use of the "your" money. Of course, you would want to amend your tax returns for the last 3 years to get back any taxes you may have paid for your SS payments.

So far, I don't believe anyone here has tried this yet.

Huh, are you kidding me ?

Kinda like "stoozing" on credit-card 0% balance-transfer offers ?

And the SS doesn't want ANY interest on the returned money, wow !

 

[MJ]

Apparently you dont even have to amend your taxes. Theres a place on the return to do it all as a credit in one year.

I just caught your comment cfb. If I understand you, there is a place in the IRS return that will allow you to enter credits for up to 3 years or possibly longer?
That would be great but if you live in a taxable income state will they allow you the same option?

MJ

 

[OAG]

The SSA Form is SSA-521 which is here as a pdf http://www.ssa.gov/online/ssa-521.pdf. BTW there is no 3 year limitation and, insofar as the information I have received from the SSA, the major requirement is that you return all benefits paid WITHOUT interest. If you are over 65 that also includes paying out of pocket for Medicare. The entry on the 1040 for returned SS benefits also is not limited to 3 years at all. Of course if you wait too long you could get into a negative income position on the return and I am not sure if you would get benefit of a Net Loss Carry Forward to the following years.

 

[MJ]

The SSA Form is SSA-521 which is here as a pdf http://www.ssa.gov/online/ssa-521.pdf. BTW there is no 3 year limitation and, insofar as the information I have received from the SSA, the major requirement is that you return all benefits paid WITHOUT interest. If you are over 65 that also includes paying out of pocket for Medicare. The entry on the 1040 for returned SS benefits also is not limited to 3 years at all. Of course if you wait too long you could get into a negative income position on the return and I am not sure if you would get benefit of a Net Loss Carry Forward to the following years.

Thanks for the update.

I mentioned up the 3 years because I thought I would have to do an amended return and which is limited to the past 3 years. Of course, if you had a decent amount of medical expenses, going beyond 65 might not be a good idea.

I still have lots time to think about that option (if it will be available) as I have over 2 1/2 years before I can collect.

MJ

 

[packrat44]

Does anyone have first-hand experience or know personally someone who has taken early SS and paid it back at a later date to draw the higher amount? Sounds too good to be true. At times like this I usually look for the: "however"; "but"; "if"; "except when"; etc.

 

[mickeyd]

Does anyone have first-hand experience or know personally someone who has taken early SS and paid it back

Do you mean to imply that it is some kind of urban legend? Possibly so, I had never questioned it since all of the info reported on this forum is almost 100% accurate, or at least that is what I have been led to believe...

I have never spoken to anyone who has done this. I would also be interested in hearing from anyone who has such experience.

 

[OAG]

Stay tuned: I sent a SSA-521 to SS asking to do this last week. Asked them to send me the number to put on the check, withdraw the application, and in the interim where should I send the past, current and future, MEDICARE Premiums. Let you know when I get a response.

 

[REWahoo]

Let you know when I get a response.

Great! I'll be very interested to see what they have to say to your request.

 

[FinanceGeek]

Poster 2B pointed out this article to us a few days ago:
Where can a 70-year-old buy the least expensive life annuity?

My conclusion - there's no reason under the sun not to take SS as early as possible. The risks of waiting are: you may not live long enough to receive as much (or any) benefit, and the politicos can change the system (hint: the changes won't be in your favor).

 

[Bikerdude]

Stay tuned: I sent a SSA-521 to SS asking to do this last week. Asked them to send me the number to put on the check, withdraw the application, and in the interim where should I send the past, current and future, MEDICARE Premiums. Let you know when I get a response.

What did you list as the reason you were withdrawing your application?

 

[Rustic23]

I had considered delaying SS till 70. The reason is the higher payment. You see I have three pension checks (SS included) All go down with my death. We live comfortable on two checks plus a 4% SWR. So, it seems to make sense to delay SS.

 

[haha]

You see I have three pension checks (SS included) All go down with my death.

Hey, at least you are not likely to wake up some night with a hole in your head and DW standing nearby with a smoking gun. Good planning!

Ha

 

[packrat44]

I had considered delaying SS till 70. The reason is the higher payment. You see I have three pension checks (SS included) All go down with my death. We live comfortable on two checks plus a 4% SWR. So, it seems to make sense to delay SS.

Hey, at least you are not likely to wake up some night with a hole in your head and DW standing nearby with a smoking gun. Good planning!

Ha

Yep. Always want to be worth more alive than dead. Don't want to give the DW any strange ideas.

 

[OAG]

What did you list as the reason you were withdrawing your application?

Just that "This application is based the fact that I did not realize it was to our long-term financial benefit to delay my application for benefits.".

 

[OAG]

What did you list as the reason you were withdrawing your application?

"This application is based the fact that I did not realize it was to our long-term financial benefit to delay my application for benefits."

 

[Rich]

I'm treating it like an annuity...

We won't need the money. I'm treating it like an annuity (and a form of insurance) for my wife. Untouched, my SS will grow at 8.5% per year until age 70. That's a guaranteed amount of money increase and one hard to find elsewhere. So, should I predecease my spouse, she'll have a substantial additional amount of money to live on (we have other money and pensions, so SS would be on top of the other stuff).

Rich

 

[teejayevans]

Poster 2B pointed out this article to us a few days ago:
Where can a 70-year-old buy the least expensive life annuity?

My conclusion - there's no reason under the sun not to take SS as early as possible. The risks of waiting are: you may not live long enough to receive as much (or any) benefit, and the politicos can change the system (hint: the changes won't be in your favor).

1.If I die early, I don't care. If I die late and postpone SS I can go around
tell everybody I'm sticking it to the man
2. They not going to change the system, they'll change the tax laws like
they did before.
TJ

 

[OAG]

If you remember I sent in a SS-521 regarding withdrawal of an application for SS, repayment of all benefits paid to date back in September 2007. The form and a cover letter was sent to our local office here. Well this week (10/25) I got a call from a SS Rep in CHICAGO and we had a rather long discussion. She just wanted to know if I knew what I was asking. She said it was "my decision" and SS would honor the request but she also recommended that I go talk to a local SS Rep at the local office before I actually withdraw the application. I said "sure, I'll would go". Called the SS at the 1-800 number she provided and we have a "sit down" scheduled for 11/20. Will follow up after the "sit down".

 

[REWahoo]

R Wood, thanks for the update. Please continue to keep us posted on your progress.

 

[packrat44]

If you remember I sent in a SS-521 regarding withdrawal of an application for SS, repayment of all benefits paid to date back in September 2007. The form and a cover letter was sent to our local office here. Well this week (10/25) I got a call from a SS Rep in CHICAGO and we had a rather long discussion. She just wanted to know if I knew what I was asking. She said it was "my decision" and SS would honor the request but she also recommended that I go talk to a local SS Rep at the local office before I actually withdraw the application. I said "sure, I'll would go". Called the SS at the 1-800 number she provided and we have a "sit down" scheduled for 11/20. Will follow up after the "sit down".

Keep us posted. Very interested in the out-come along with the particulars. What reason did you give them for your deciding to withdraw your application? How long have you been drawing benefits?

 

[Nords]

Keep us posted. Very interested in the out-come along with the particulars. What reason did you give them for your deciding to withdraw your application?

"This application is based the fact that I did not realize it was to our long-term financial benefit to delay my application for benefits."

.