Social Security DO-OVER May Disappear

[Alan]

More like less than 0.01%...

Hey, I'm a conservative sort of a guy, and too lazy to look things up - thanks for pointing out how far below 1% my remembrance was

 

[ziggy29]

More like less than 0.01%...

Yeah, but I'd bet collectively the folks on this board are going to be *way* more likely than average to be able to take advantage of it if it made sense to do so.

I reckon the vast majority of us will enter retirement debt-free (maybe very small mortgages or other 0% financing offers they could pay off if they wanted to) and have significant personal savings. That doesn't describe the average SS recipient, most likely.

 

[TromboneAl]

I remember talking to a friend who was agonizing over whether to take SS earlier or later. I told her about the do-over option. She laughed like I was an idiot, and said "But where would you get the money to pay it back?"

 

[ziggy29]

I remember talking to a friend who was agonizing over whether to take SS earlier or later. I told her about the do-over option. She laughed like I was an idiot, and said "But where would you get the money to pay it back?"

Let me guess: paycheck to paycheck?

 

[FIRE'd@51]

I'm not so sure that the restart is mostly used by the "well-to-do". Consider the retiree who takes SS at 62, then before he reaches FRA of 66, decides to (or has to) go back to work. As I understand it, such a person would lose $1 of his SS benefit for every $2 he earns from wages in excess of $13,000. I believe this was the reason for allowing the repay and restart in the first place. The new proposal would appear to only allow the restart if one returned to work by age 63. What about someone who had to go back to work at an older age than 63 but still below FRA?

 

[MasterBlaster]

I guess my friend was right:

http://www.early-retirement.org/for...y-be-discontinued-47985.html?highlight=social

You seem to believe that it's all fait accompli.

This has to be approved by congress. Liberals in congress believe that if you change one blade of grass in SS then it will all fall apart piece by piece and they will fight any and every change to the bitter end.

What you have read and what you have heard is just people talking and proposals being suggested. And there are as many proposals to fix SS as there are congressmen.

This do-over provision has not yet been taken away. I would ignore the chatter until you hear of definite changes. Otherwise you'll drive yourself nuts.

To be fair though, changes in SS are inevitable.

 

[TromboneAl]

I was thinking about how changes to SS often exclude people close to or older than retirement age. I used to think that this is done to avoid opposition from the only people who actually think about SS. However, I realized that a change could be disastrous those who are already dependent on upcoming SS checks, since they can't delay retirement or go back to work.

IOW, any upcoming changes to SS are less likely to impact us in the over-55 group (hopefully).

 

[rescueme]

Related thread on BH (in case you missed it):

Bogleheads :: View topic - No more Social Security Do-overs?

 

[haha]

I jumped on this today. My application for withdrawal is now officially timestamped and submitted.

I wasn't even sure I wanted to do it, but try to take that choice away and I was on it like maggots on meat.

I hope the tax refund hassles are not too great.

Ha

 

[CuppaJoe]

I jumped on this today. My application for withdrawal is now officially timestamped and submitted.

I wasn't even sure I wanted to do it, but try to take that choice away and I was on it like maggots on meat.

I hope the tax refund hassles are not too great.

Ha

Ha, how does it work with MediCare payments?

 

[haha]

Ha, how does it work with MediCare payments?

CJ, she said that they would bill me. Currently I am getting part D and Part B deducted. I suppose I will pay a larger Medicare part B fee next year, as the deduction has been artificially held down by the rule that your net payment cannot decrease year to year.

She seemed quite well informed about the whole thing, understood why I wanted to do it, etc. I did go to a suburban office instead of downtown as I thought it might go a little better.

Ha

 

[CuppaJoe]

Thanks, Ha. You are a trailblazer. Keep us posted. I'd like to know how long it takes for them to let you know how much to pay back.

 

[Rustic23]

I did not read all the articles, but isn't it strange that the government says it does not matter when you start SS as it is based on actuarial tables and the 'average' person will get the same amount weather they take it at 62 or 70. So why would they want to change it?

 

[rescueme]

I did not read all the articles, but isn't it strange that the government says it does not matter when you start SS as it is based on actuarial tables and the 'average' person will get the same amount weather they take it at 62 or 70. So why would they want to change it?

Because some people are "more average" than others? ...

Anyway, that statement also pertains to the indivudial. It ignores what can be done by married folks to tilt the system in their favor.

How many people have read that statement (without investigation/follow-up) and just accepted it as the truth (saved SS some work, I would think)

 

[haha]

I did not read all the articles, but isn't it strange that the government says it does not matter when you start SS as it is based on actuarial tables and the 'average' person will get the same amount weather they take it at 62 or 70. So why would they want to change it?

This alone says that any woman who is not mortally ill should take it at 70. And the various married couple dodges that have been discussed are clearly opportunities.

It is likely more of a toss-up for a single man like myself, but it is an easy way to improve monthly cash flow, and this was my reason for starting the process. With short term govt interest rates being what they are, and no visibility as to when they might change the added govt annuity seemed like a good idea. I had originally planned on waiting till age 70, but in Nov 2008 I thought this income might keep me from having to sell any depressed stock, so I took it retroactive to May 2008 (so I got a lump sum). And it likely paid off. I must admit it felt good to get a check from Uncle. My only prior checks were income tax refunds of my overpayments.

Ha

 

[youbet]

Ha,

Are you paying back with immediate restart? Or paying back and restarting sometime later?

 

[haha]

Ha,

Are you paying back with immediate restart? Or paying back and restarting sometime later?

The clerk did not offer me the option of immediately restarting. She said SS will send me a bill for what I have received, and that I should pay that invoice and "wait a bit for it to work through the system" before applying again. Practically speaking, I will try to figure out the interactions between Medicare Pt B premium and SS being withdrawn vs. active payments and perhaps I will start again in time to get payments in December, if they will let me. Otherwise I will wait until I am 70, god willing.

I hope anyone with knowledge about these interactions will post in this thread, or start another.

I did get the impression that this young woman, who was just luck of the draw when I came in and took a number, was completely familiar with the withdrawal of application process. She took a look at me and asked pointedly if I had the money to repay. Basically I don't look like I have the money to buy a good cup of coffee.

Ha

 

[youbet]

The clerk did not offer me the option of immediately restarting. She said SS will send me a bill for what I have received, and that I should pay that invoice and "wait a bit for it to work through the system" before applying again. Practically speaking, I will try to figure out the interactions between Medicare Pt B premium and SS being withdrawn vs. active payments and perhaps I will start again in time to get payments in December, if they will let me. Otherwise I will wait until I am 70, god willing.

I hope anyone with knowledge about these interactions will post in this thread, or start another.

I did get the impression that this young woman, who was just luck of the draw when I came in and took a number, was completely familiar with the withdrawal of application process. She took a look at me and asked pointedly if I had the money to repay. Basically I don't look like I have the money to buy a good cup of coffee.

Ha

OK, thanks.

Restarting ASAP, which apparently can take a few months, is what I meant by immediate restart, as opposed to waiting until some future year such as when you reach age 70.

I'm glad the process, greased by having a knowledgeable clerk to help, went easily for you. I hope the tax calculations go the same way........

I started SS one yr ago at 62 yo. I've been running some scenarios considering either repaying now and delaying restart or repaying later (at FRA) and restarting immediately. I've also been looking at just suspending for a few years and then restarting with the higher amount. Because DW cannot collect any of my SS due to the GPO provision, none of this provides her with any additional protection against outliving our assets. Taking SS early, as is my current case, does as it allows us to spend less from our retirement portfolio. Makes it a tough decision........

 

[haha]

OK, thanks.

I started SS one yr ago at 62 yo. I've been running some scenarios considering either repaying now and delaying restart or repaying later (at FRA) and restarting immediately.

The only thing I think of is that if you are seriously intersted in doing this, it may disappear if you don't act soon. OTOH, surely sometime before long there will be low risk highly attractive investment opportunities. So the current cash flow contribution from SS might be helpful.

At my age I only like shooting fish in a barrel, not interested in "long term market returns".

Ha

 

[youbet]

The only thing I think of is that if you are seriously intersted in doing this, it may disappear if you don't act soon. OTOH, surely sometime before long there will be low risk highly attractive investment opportunities. At my age I only like shooting fish in a barrel, not interested in "long term market returns".

Ha

Most likely I'll stay as-is. The goal is to provide DW with some insurance against outliving our $$$ should I croak early and not be there to manage things. Unfortunately, she can't collect on my SS so no protection for her to be gained by repaying or suspending. However, while I'm collecting SS, it reduces our portfolio withdrawals dollar for dollar so at least she'd have a larger portfolio to work with, but not an annuity like SS provides.

I agree that if I wanted to repay, now is the time to do it since things are likely to change in the future.

 

[haha]

Most likely I'll stay as-is. The goal is to provide DW with some insurance against outliving our $$$ should I croak early and not be there to manage things.

That is simiar to my goal- not for a wife, but to give me some relatively safe amount that neither I nor Bernanke can screw up.

Ha

 

[haha]

Update on Payback

So far smooth as silk, no drama. I got my invoice for complete payback, the amount appears to be correct, I have the money available and my check will be in the mail on Monday.

I was nervous about this based on all the warnings on BogleHeads and elsewhere, but so far everyone I have dealt with has been well informed and happy to meet my needs.

I feel good to be buying a US govt COLA annuity at this price, whether I live to 100 or get hit by a bus this afternoon. Which unfortunately is disturbingly frequent around here and in Portland too.

I never would have started payments prior to age 70, but I was worried about liquidity during the '08 crash. Overall, unless there are special circumstances, I feel that just waiting until 70 is more secure than deliberately starting early and planning to re-do. Especially since some seem to be framing this strategy as a fat-cat fiddle.

Ha

 

[haha]

Two months now since I filed form 521 to pay back SS. I did get the repayment invoice from them about one month ago, and paid it. Then I heard nothing, and could find out nothing either visiting or calling. As of two weeks ago, the check had not yet cleared. I would say that communication has been spotty at best.

But today, which is on the timetable that my SS payments have been dropping into my account, I got a deposit of $1.40, rather than the usual monthly payment amount. I figure that has to be some overpayment return, or small credit balance to square my account as if I had never started payments.

Still no investment opportunities that appeal to me, so I will let it ride until age 70 to max out my monthly SS payment.

Thinking of Ben Stein's paradigm I have to feel good. I have made totally irresponsible decisions over and over, and have had my share of bad luck, but although I won't be living on a golf course I have only one more task to nail down a retirement as free from financial worries as I can get it- find and buy a low cost but nice condo in a building and neighborhood that meets my needs.

Ha

 

[FIRE'd@51]

But today, which is on schedule that my SS payments have been dropping into my account, I got a deposit of $1.40, rather than the usual monthly payment amount. I figure that has to be some some overpayment return, or small credit balance to square my account as if I had never started payments.

Am I interpreting this correctly that you kept receiving your regular SS payments for 2 months since you filed to stop?

 

[haha]

Am I interpreting this correctly that you kept receiving your regular SS payments for 2 months since you filed to stop?

Not really. Payments are received with a one month lag, so for example you get the July payment in August, August payment in September, September payment in October, etc. So my SS enrollment apparently stopped immediately, but I got one more (August) payment in arrears in September.

Ha