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Social Security take-back -- RIP
Old 12-08-2010, 06:23 PM   #1
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Social Security take-back -- RIP

Loophole has been closed for a re-do on SS. You can no longer pay back your benefits and reset your SS payments after 12 months of receiving them.
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Old 12-08-2010, 06:27 PM   #2
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Wow, didn't Ha do this, this year? Good thing he didn't wait.
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Old 12-08-2010, 06:30 PM   #3
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For the countries sake I am glad that they did this. However, this does mean now I am really going to have to chose when to take social security, damn that sucks.
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Old 12-08-2010, 06:32 PM   #4
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I'm surprised they bothered. Someone had too much free time.
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Old 12-08-2010, 06:33 PM   #5
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Thanks Rich. I guess we saw that coming. Congrats to Ha for getting in under the wire.

I did notice this:

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In addition, beneficiaries entitled to retirement benefits may voluntarily suspend benefits only for the months beginning after the month in which the request is made.
I have thought about suspending my SS payments from now (63.4) until I'm 66 or 70. Does anyone have any clue on how to figure your benefit at 66 or 70 if you collected for a period (1.4 yrs in my case) after 62 and before 66 or 70?
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Old 12-08-2010, 06:44 PM   #6
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Oh well, I had intended to take advantage of that loophole one day. When it sounds too good to be true...
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Old 12-08-2010, 07:13 PM   #7
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So it looks like you can still do it, you just have to withdraw within one year after you start receiving benefits.

I wonder why they don't just kill it effective immediately (now that Ha is all set ).
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Old 12-08-2010, 07:52 PM   #8
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US News did an article summarizing the provisions:

Social Security Payback Option Eliminated - Planning to Retire (usnews.com)

Note that it is only a tentative ruling now and is up for comments until February 7th. After that a final ruling will be made.

There may still be time to squeek in, if you are so inclined.
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Old 12-08-2010, 07:56 PM   #9
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Wow, didn't Ha do this, this year? Good thing he didn't wait.
I can't remember who posted the bit about it being threatened last August 29. Was it you, Rich? Thanks!

I filed the 521 the next morning. I had already decided that this was a good move, I was just fiddling with considerations about timing. The warning announcement posted on the board told me that the odds favored doing it pronto.

I think this change has been decided, and the comments period is just a formality. It may be required by some law or ruling. But the change is being spun as "an end to interest free loans". I can almost fill in the remainder-(loans largely and illegitimately benefitting those evil rich who fiddle the system on the backs of us poor and deserving citizens). Spin always exists for a reason. Parsing spin is an old and valuable intelligence methodology.

The redo was not my original strategy. I had felt that simply waiting until I was 70 was best. But in Dec 2008 I wanted every cent I could lay my hands on to be available for investing, and I figured starting SS would take some spending pressure off my portfolio. As it happened, they were able to give me 5 months or so in arrears also. So it did help me in this way, and I am grateful that I was able to payback and restart later, and grateful to board members who brought this to my attention.

Ha
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Old 12-08-2010, 08:44 PM   #10
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"The agency is changing its withdrawal policy because recent media articles have promoted the use of the current policy as a means for retired beneficiaries to acquire an “interest-free loan.” "
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Old 12-08-2010, 08:53 PM   #11
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I can't remember who posted the bit about it being threatened last August 29. Was it you, Rich? Thanks!
Or maybe it was Gotadimple, in this thread. Either way, I am so glad that you got in under the wire.
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Old 12-08-2010, 10:00 PM   #12
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"The agency is changing its withdrawal policy because recent media articles have promoted the use of the current policy as a means for retired beneficiaries to acquire an “interest-free loan.” "
It is the fault of the internet. I first heard about via Kiplinger, I knew most of the details 10 years ago from the Motley Fools/Intercst Early Retirement board. I am waiting for them to screw with the 72(t) next
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Old 12-08-2010, 10:20 PM   #13
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Loophole has been closed for a re-do on SS. You can no longer pay back your benefits and reset your SS payments after 12 months of receiving them.
well it looks like now the best thing to do (for a single) is wait till 70
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Old 12-08-2010, 11:18 PM   #14
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"The agency is changing its withdrawal policy because recent media articles have promoted the use of the current policy as a means for retired beneficiaries to acquire an “interest-free loan.” "
Perhaps. But couldn't they also change the policy so that some interest would have to be paid back if that were the motivation?
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Old 12-09-2010, 03:34 AM   #15
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Thanks, Rich, this is good news. I was planning on paying it back at about age 70 but was dreading the accounting, forms, walking the paperwork through, and dealing with clerks. There were nightmares similar to Sundays after brief vacations; how would I keep the thing on my do-do list so far in the future. Anyone else notice an uptick in laziness in the third year?
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Old 12-09-2010, 06:01 AM   #16
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Sadly I seem to have missed the cutoff by a couple of months. I turned 62 on 9/6/09, got my first check deposited 11/9/09! Would have been nice if they "grandfathered" us recent withdrawal planners, say for those starting benefits over the last year or so. I was planning to exercise withdrawal of benefits when I turned 70, as I was led to believe was legal with the SSA. I did know that changes were in the works but foolishly felt that they would be lenient with us recent claimants.

Anyone know, my wife began spousal benefits in January based on my benefits, i.e. 50%. Would it make sense to at least withdraw her application?

Thanks,
Chuck
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Old 12-09-2010, 08:26 AM   #17
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For the countries sake I am glad that they did this. However, this does mean now I am really going to have to chose when to take social security, damn that sucks.

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Old 12-09-2010, 12:50 PM   #18
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Or maybe it was Gotadimple, in this thread. Either way, I am so glad that you got in under the wire.
Yep, it was me. Glad it helped!

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Old 12-09-2010, 01:26 PM   #19
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I'm surprised they bothered. Someone had too much free time.
"OK, guys, we have to figure out how we're going to save money for next fiscal year. This meeting is going to stay in session until we squeeze every last penny out of the budget."

Next we'll be reading headlines like "Social Security saves hundreds of millions of taxpayer dollars!!"
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Old 12-09-2010, 01:49 PM   #20
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I'm surprised they bothered. Someone had too much free time.
Yes, I'm basically surprised that this really made it to someone's radar screen. Good or bad, it seems like a real small fry relative to the effort it would take to do something. I can only imagine that changing these rules involves a ton of bureaucracy. They gotta have bigger problems than this?

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