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Social Security DO-OVER May Disappear
Old 08-24-2010, 07:31 PM   #1
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Social Security DO-OVER May Disappear

An article from Kiplinger's posted today indicated that they believe the Social Security Administration will act to eliminate the pay-back provision, sometime in the next few months.

Social Security Payback Option May Disappear - Kiplinger

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Old 08-24-2010, 07:44 PM   #2
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Interesting!

It amazes me that this do-over strategy has gained their attention, given that the article says that only 1000 SS recipients took advantage of it in 2009. Talk about picky and detail-oriented...
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Old 08-24-2010, 07:45 PM   #3
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It amazes me that this do-over strategy has gained their attention, given that the article says that only 1000 SS recipients took advantage of it in 2009. Talk about picky and detail-oriented...
1000 only, that's a non-issue then.

What will the financial press write about when they can't have articles discussing this ?
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Old 08-24-2010, 10:42 PM   #4
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argggggggghhhhhhhhhhhh
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Old 08-25-2010, 10:43 AM   #5
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Interesting!

It amazes me that this do-over strategy has gained their attention, given that the article says that only 1000 SS recipients took advantage of it in 2009. Talk about picky and detail-oriented...
I would guess it's not the 1000 who used it in 2009. It's the 500 who used it in 2007 doubling in only two years.

This is one of those things that can be ignored as long as hardly anyone uses it. But, when it gets publicity from sources like Kiplingers, it's plausible that the number of users could go up very rapidly. If I were at the SS administration, I'd say let's kill this before any more people start making plans to use it.
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Old 08-25-2010, 12:08 PM   #6
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How many people have the knowledge and the capacity to actually pay back real money they have already spent.
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Old 08-25-2010, 12:12 PM   #7
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How many people have the knowledge and the capacity to actually pay back real money they have already spent.
I would venture to say that there are a few on this board, and boards such as BH (since there were several folks over there talking about their experience in withdrawl/repay) that could do it.

For the "common man" (or woman), probably not.

However, whoever said we were common?

On a personal note, I would believe that there is a real possibility (however slight) that this option will be removed in the future. It's easier when you don't have a "political force" to support its continuance.

Of course, that only my opinion ...
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Old 08-25-2010, 12:44 PM   #8
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It sounds like a loophole that rich people can take advantage of so it will be a good thing to get rid of because who wants rich people to get richer?

In reality of course it probably doesn't cost SS any more or less to offer the payback option (just like the timing of when people take social security makes no difference to SS in terms of actuary). It might or might not benefit the individual who uses the loophole, takes SS early or late, etc.

Personally I would have everyone take SS when they turn their full retirement age and get rid of all the options.
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Old 08-25-2010, 12:53 PM   #9
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The rules of Social Security will change. It is inevitable given the money shortfall(s). So we can all speculate on what gets changed.

It gets really hard to game the system without knowing what the rules will be.
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Old 08-25-2010, 12:58 PM   #10
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Personally I would have everyone take SS when they turn their full retirement age and get rid of all the options.
I assume you are married. Have you worked out the possible options if you do a "dual SS" plan?

Just wondering if you did, and would still make the same statement...
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Old 08-25-2010, 02:13 PM   #11
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Unless you have a very long life expectancy, I can't see it making sense....if you died the next year, you just paid back all that money and didn't get anything out of it. How many years of extra payments would it take to make up the difference, especially factoring in time-value of money?
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Old 08-25-2010, 02:27 PM   #12
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I assume you are married. Have you worked out the possible options if you do a "dual SS" plan?

Just wondering if you did, and would still make the same statement...
Yes, yes, and yes.
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Old 08-25-2010, 02:32 PM   #13
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Unless you have a very long life expectancy, I can't see it making sense....if you died the next year, you just paid back all that money and didn't get anything out of it.
Are we talking SS here or annuities? Same question applies, right - except you're using SS money in this case and your own money to buy the ann...
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Old 08-25-2010, 02:36 PM   #14
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Are we talking SS here or annuities? Same question applies, right - except you're using SS money in this case and your own money to buy the ann...
If you are taking a lifetime income as an annuitization from the annuity with no period-certain guarantee, then yes, the same rationale would apply. A person with Stage 4 cancer wouldn't annuitize because they'll never see the money back.

An EIA with an income rider that does not eliminate the accumulated value immediately is a different story because if you passed away shortly after taking income, the beneficiaries would still receive the lump sum accumulation value that had not been drawn down yet. Social Security won't give you any of the money back if you died the next day.
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Old 08-25-2010, 02:39 PM   #15
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Yes, yes, and yes.
Interesting. In our case (assuing I pass first), my DW will receive 2.5x her age 62 benefit at my passing, at age 70.

And that dosen't account for the close to $1k/month I'll receive when I turn 66 and file against her SS, from the ages of 66-69.

That means close to an extra $48k I'll get while waiting for my benefit, plus the assumption that my DW will receive 100% of my benefit (much more than hers) after I pass.

If you say so, OK...
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Old 08-25-2010, 02:49 PM   #16
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I'm know there is typically a nice little marriage benefit (Marriage and Social Security Benefits - US News and World Report). From an actuary standpoint for SS in general, it's probably six of one, etc. no matter how or when a couple takes their benefits. And unlike the payback option, this one is something most couples can do (not just the "rich" people) so I'm sure it's safe.
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Old 08-25-2010, 03:48 PM   #17
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It gets really hard to game the system without knowing what the rules will be.
Yeah, life is like that, y'know?

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Old 08-25-2010, 04:56 PM   #18
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I had every intention of going the payback route, but at least it appears I'll know that option is gone, well before I could've exercised it. So I just won't take SS early like I'd planned...
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Old 08-26-2010, 04:31 PM   #19
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Well...I had definitely planned on maybe using it as an option ..but that decision is 10 plus years away for me. Don't like the fact that the option may be taken away.
But then there is little that I have liked the last 2 years anyway....just another added to the mix.
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Old 08-26-2010, 04:34 PM   #20
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Well...I had definitely planned on maybe using it as an option ..but that decision is 10 plus years away for me. Don't like the fact that the option may be taken away.
Nobody under the age of 50 should ever be surprised that the economic rules their parents played under are changing, and not for the better.
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