Trade in your social security check for a bigger one

[New Thinking]

I was considering this. Does my spouse also have to repay her benefits because I am electing this pay back option?

If the spouse is receiving spousal benefits on your work record, she has to repay those as well. That is why this is often sub-optimal.

[OAG]

Originally Posted by New Thinking

If the spouse is receiving spousal benefits on your work record, she has to repay those as well. That is why this is often sub-optimal.

See my response #16.

[RonBoyd]

Originally Posted by chinaco

If people begin gaming the system, it will be changed. When I read about this option, I thought that it had to be approved. If that is true, and it begins to happen too often, they could simply begin rejecting requests (tighten the bureaucratic rules).

I am beginning to change my mind on this. Now that everyone (financial writers, to be kind) has "discovered" this "secret" and are now shouting it from the roof tops. This kind of "buzz" can only end in misery. It may, very soon, become too politically untenable to be allowed to continue. Someone is bound to see this as the unwashed masses getting something for nothing and make a big stink.

The Puritan's greatest fear was always that "out there somewhere, someone is having fun."

[TromboneAl]

Now that everyone (financial writers, to be kind) has "discovered" this "secret" and are now shouting it from the roof tops.

I still wouldn't worry too much. If I stopped 200 people on the street, I'll bet that not one person will have heard about this.

[Nords]

Originally Posted by RonBoyd

Someone is bound to see this as the unwashed masses getting something for nothing and make a big stink.
The Puritan's greatest fear was always that "out there somewhere, someone is having fun."

Well, hey, the rules are the same for everyone. If they want to play then they can buy a ticket too!

I'm surprised that enterprising financiers haven't figured out how to loan "Social Security payback" funds to people for a payment out of their larger SS checks. It's an interesting variation on viaticals.

[youbet]

Originally Posted by TromboneAl

I still wouldn't worry too much. If I stopped 200 people on the street, I'll bet that not one person will have heard about this.

Actually, Al, it's one out of every 247.

[Art G]

I must be missing something. If I return all the money, then die tomorrow, didn't my heirs just get screwed out of all that saved up money? How is this different than being annuitized?

[RonBoyd]

Originally Posted by Art G

I must be missing something. If I return all the money, then die tomorrow, didn't my heirs just get screwed out of all that saved up money? How is this different than being annuitized?

But what if you don't die? Anyway, you are correct it is just (merely?) an "inflation-adjusted life annuity." However, it does start with a 9.5% payout on the "returned" money.

Raise Your Living Standard---Reapply for Social Security - Registered Investment Advisor

[homestead]

Originally Posted by R Wood

At age 70 husband applies again under his record and gets benefits (1,600 per month). Her benefits are then kicked to 800 a month (1/2 of his full age 70 benefits).

I think her benefits can only go up to a maximum of 1/2 of his full retirement age (66) benefits.

[OAG]

Originally Posted by homestead

I think her benefits can only go up to a maximum of 1/2 of his full retirement age (66) benefits.

You may be right, but in my research on this which included the question to a SSA call center worker, indicates what I stated. Do you have a better reference? I would be interested to see it.

[homestead]

Originally Posted by R Wood

You may be right, but in my research on this which included the question to a SSA call center worker, indicates what I stated. Do you have a better reference? I would be interested to see it.

Retirement benefits by year of birth


4. The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age.

Note full retirement age on this page is less that 70.

[OAG]

Originally Posted by homestead

Retirement benefits by year of birth


4. The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age.

Note full retirement age on this page is less that 70.

See the bottom of the page you provided: "Note: If you delay your benefits until after full retirement age, you also may be eligible for delayed retirement credits that would increase your monthly benefit."

Don't want to nit pick but seems in line with what I was told from the call center. Delay retirement, which withdrawal and repayment causes, since the original application is null and void, get additional credits. BTW what is the "spouse" drawing prior to your age 70 since there is no basis to determine because you are not drawing benefits. She gets benefits on her own record since that is the only one that applies, until you start drawing benefits at, or before, age 70.

[New Thinking]

RWood wrote"

Spouse (300 a month to husbands age 70 or 10 years at 300 per month = 36,000. Husband 10 years at 150 per month = 18,000. Total benefits 54,000.

RWood: Where do you get the husband at 10 years of $150/mo? I think the most the husband could do is four years from Full Retirement Age of 66 to age 70...You could also have some serious tax consequences if you are withdrawing money from an IRA to pay back a large amount..I think that this strategy is not going to be worth it for most people..IMO, it is encouraging individuals to try to get an interest free loan of a few thousand dollars and they could end up paying more than that in taxes due to the complexity of the tax rules..The worst part of the strategy is that it is encouraging higher earning husbands to start SS early..then few will ever write a check for $XX thousand at age 70..So the survivor benefit will not be passed on to the future widow..Just my opinion..

[homestead]

Originally Posted by R Wood

See the bottom of the page you provided: "Note: If you delay your benefits until after full retirement age, you also may be eligible for delayed retirement credits that would increase your monthly benefit."

Don't want to nit pick but seems in line with what I was told from the call center. Delay retirement, which withdrawal and repayment causes, since the original application is null and void, get additional credits. BTW what is the "spouse" drawing prior to your age 70 since there is no basis to determine because you are not drawing benefits. She gets benefits on her own record since that is the only one that applies, until you start drawing benefits at, or before, age 70.

I agree your benefit benefit will increase if you delay until 70 but I don't think the spouse's benefit will increase past the maximum of 50% of your benefits at full retirement age. (~66) However i would love to be proved wrong on this.

[OAG]

Originally Posted by New Thinking

RWood wrote"

RWood: Where do you get the husband at 10 years of $150/mo? I think the most the husband could do is four years from Full Retirement Age of 66 to age 70...You could also have some serious tax consequences if you are withdrawing money from an IRA to pay back a large amount..I think that this strategy is not going to be worth it for most people..IMO, it is encouraging individuals to try to get an interest free loan of a few thousand dollars and they could end up paying more than that in taxes due to the complexity of the tax rules..The worst part of the strategy is that it is encouraging higher earning husbands to start SS early..then few will ever write a check for $XX thousand at age 70..So the survivor benefit will not be passed on to the future widow..Just my opinion..

Opps, should have said 7 years. Spouse is 3 years older, she draws $300 a month on her own record, and other he applies for benefits under HER record and gets 50%). She is 62 on day 1 of her benefits, husband is 59, and, at age 62, draws under her record until he is 70 (7 years) at which he applies under his record and hers is "kicked" to 50% of his over 70 rate. Why do you have to take money out of an IRA? Take it out of taxable money (CD's, MMA, etc.,) or maybe a HEL.

Kind of mute for me since I am 67 but I am waiting for a reply from SSA on my application to withdraw.

[dbr]

Originally Posted by R Wood

Opps, should have said 7 years. Spouse is 3 years older, she draws $300 a month on her own record, and other he applies for benefits under HER record and gets 50%). She is 62 on day 1 of her benefits, husband is 59, and, at age 62, draws under her record until he is 70 (7 years) at which he applies under his record and hers is "kicked" to 50% of his over 70 rate. Why do you have to take money out of an IRA? Take it out of taxable money (CD's, MMA, etc.,) or maybe a HEL.

Kind of mute for me since I am 67 but I am waiting for a reply from SSA on my application to withdraw.

I would fear that the spouse would only be able to take 50% of the age 66 benefit, not 50% of the age 70 benefit. I am pretty sure that the rule for spousal benefit is a maximum of 50% of the spouses "full benefit." The definition of full benefit is the benefit at "full retirement age" as explained here: Financial Guide: SOCIAL SECURITY BENEFITS:* How To Get The Maximum Amount

It is also explained how the retirement benefit increases further with what is called "delayed retirement," but this language does not imply that the "full benefit" increases with delayed retirement, and it is the "full benefit" that the spousal benefit depends on.

I will grant that it is difficult to find clear, systematic explanations of these conditions, so if there is different information from the above, I will stand corrected.

[REWahoo]

Originally Posted by dbr

It is also explained how the retirement benefit increases further with what is called "delayed retirement," but this language does not imply that the "full benefit" increases with delayed retirement, and it is the "full benefit" that the spousal benefit depends on.

It looks as if there is no benefit increase for the spouse due to delayed retirement. Found this on SSA.gov: Benefits for your spouse

"Even if he or she has never worked under Social Security, your spouse

• can receive a benefit equal to one-half of your full retirement amount if they start receiving benefits at their full retirement age.
• Note: The benefits for your spouse do not include any delayed retirement credits you may receive."