Social Security: Re-starting SS at 70 y.o.?

[Orchidflower]

Awhile ago there was great discussion about paying back the collected SS funds a couple months before 70 and re-starting your SS benefits. I just returned from the SS office this morning; and, when I asked if and when this will come into effect, nobody seemed to have any knowledge of this. In fact, the gals there at the desk--who deal with questions like this every day--say they haven't heard a thing about it and seemed shocked.
I asked how would I even know if the law was changed regarding paying back and re-starting at 70 being no longer allowed, and I was told it would be on the socialsecurity.gov website.
However, they, also, said that--even IF it became law--it would take a good year to go into effect. So, for now, I am at the "What? Me worry?" stage--unless someone on this board has better information than I got...other than the guy at the corner gas and grocery telling them.

Here's the link to Social Security:
Social Security Online - The Official Website of the U.S. Social Security Administration

 

[REWahoo]

Orchid, I'm not surprised the folks at the local SS office gave you a blank look. There was a thread a while back that linked some source saying very few people had actually done the "payback/do over" at age 70. Not something a SS clerk might ever run across.

 

[W2R]

Orchid, I'm not surprised the folks at the local SS office gave you a blank look. There was a thread a while back that linked some source saying very few people had actually done the "payback/do over" at age 70. Not something a SS clerk might ever run across.

This is always something to consider. What if you had to battle with SS to get it done when you are age 70? Sounds like a huge hassle that (to me) might not be worth it.

But then, others have managed to pay back without any problems at all.

There are some aspects of SS, like this one, that remind me of gambling at the roulette wheel in a casino. Should I put my money on "take it at 62", "take it at 66", "take it at 70", or "take it at 62 and repay at 70"? Round and round and round she goes, and where she stops, nobody knows...

 

[ERD50]

Agree w/REWahoo. This forum represents a small minority of those taking SS. The people on this forum considering the SS payback are probably a small minority of the forum. The ones that actually do it are probably a small minority of those who ever considered it. So I would not expect it to even be on the radar screen of anyone in an SS office.

The thing that is unique about this, and makes it a bit different from theW2R casino analogy, is that it gives you a 'second chance'. If it didn't work out for you, pay it back and you get a 'do-over' on your decision. If it did work out, keep it.

Try that at the roulette wheel, and you will find yourself being escorted by a couple of mean-looking guys with no sense of humor!

-ERD50

 

[W2R]

The thing that is unique about this, and makes it a bit different from theW2R casino analogy, is that it gives you a 'second chance'. If it didn't work out for you, pay it back and you get a 'do-over' on your decision. If it did work out, keep it.

Try that at the roulette wheel, and you will find yourself being escorted by a couple of mean-looking guys with no sense of humor!

Maybe you are the one needing a "do-over" this morning, after re-reading my post that you thought you were responding to?

 

[ERD50]

Maybe you are the one needing a "do-over" this morning, after re-reading my post that you thought you were responding to?

Re-read it, even had another cup of coffee, and lunch, and I don't see where I would want to take a 'do-over' to my post?

It seems to me, the power of this 'buy-back' option is the ability to make a decision and get a 'do-over' option later. Those are rare in life. And they don't happen at the roulette wheel (hey, I bet on odd, but even came up - do-over! nope, can't do that!). So that's why I don't see how your casino analogy applies. I can see applying that to the straight "take it at 62", "take it at 66", "take it at 70" decision w/o any buy back option, but that was not the topic of the OP.

I hope you are not taking this as confrontational, I'm just trying to get info to the OP and any readers. They will make their own choice, including the choice to not even consider it, but I for one am glad that someone brought up the 'do-over' option in this forum, and I will take it into consideration when the time comes.

-ERD50

 

[billin]

When you consider the size of the re-pay (max is about 2200/mo so about 132,000) and you'd be getting roughly 800 more per month so you'd need to live at least 14 or 15 years (depending on the cost of money) to get a payback. I'm not that confident in the government or my health.

 

[donheff]

Orchid: your post sounds like you asked them when this would become available. It is not something new that will be available in the future. It is an existing feature of SS - you can "reapply" at any time (not just when you approach 70). Look through the earlier threads and you will find the form number of the re-application.

 

[ziggy29]

When you consider the size of the re-pay (max is about 2200/mo so about 132,000) and you'd be getting roughly 800 more per month so you'd need to live at least 14 or 15 years (depending on the cost of money) to get a payback. I'm not that confident in the government or my health.

And if the higher payout kicks you into a higher tax bracket or results in more of your SS payment being taxable, it may make it even worse.

Still, it's a nice option to have if you're in a position to run the numbers at 70, gauge your health and tax situation, and have the choice.

 

[youbet]

One of the articles I've read concerning when to start collecting SS mentioned that local offices would commonly be unaware of the provision and you'll need to get in touch with someone "upstairs." They also mentioned that it would take SS several months to start your new, higher checks after you pay back so you'd need to be prepared to go without for a few months. I'll post the link if I can find it later......

 

[youbet]

It seems to me, the power of this 'buy-back' option is the ability to make a decision and get a 'do-over' option later.

Exactly.

I've started my SS (at 62) and if certain circumstances play out I may pay back and restart. But I won't know for several years and it will depend on whether I and/or DW are still alive and our health and outlook regarding longevity at that time in the future.

It's not a matter of starting SS at 62 and already knowing you'll pay back and restart. It's a matter of starting SS at 62, banking the money conservatively and determing whether to pay back or not several years down the road when you know your health status as a 66 - 70 yr old.

I have no idea what I'll wind up doing. Time will tell. I'm just leaving the door open by collecting now and managing my finances so that pay back is possible if that path looks opportunistic 4 - 8 yrs from now.

It sure would be nice if, at 66 to 70 yrs old, I'm so darn healthy I want to buy an annuity (which paying back SS amounts to).

 

[Rustward]

One exercise I did to try to understand the "when to start" question is as follows:

Used the downloadable calculator to estimate each of our SS benefits starting at 62, 63, 64 ... 70. For the two of us this gives 81 different combinations of start years. DW is subject to the WEP, hence the requirement for the calculator.

Plugged all 81 different combinations into FireCalc. Yep, 81 runs. On the Investigate tab I set FireCalc to report the spending level that could be supported. The rest of the data is kinda static, but our current numbers.

The spending levels varied only by a couple of percentage points. Turns out that for our cases, the earliest we hit the maximum was each starting at 66. We are different ages, but I did not bother with any of the exotic plans like spousal benefits or stopping and restarting.

Haven't tried to analyze whatever tax implications might apply.

May have concluded it doesn't make too much difference, just looking at the numbers and assuming we'll live to >70.

 

[rescueme]

Orchid, I'm not surprised the folks at the local SS office gave you a blank look. There was a thread a while back that linked some source saying very few people had actually done the "payback/do over" at age 70. Not something a SS clerk might ever run across.

OAG over at BH's did the "exercise". He had a lot of problems in the repayment, and even getting correct tax forms after he paid everything back at age 70.

According to an article I read last year (unreferenced) only a few hundred of the many millions receiving SS did this option, so I understand why it would be unknown to most SS office folks.

I'm not doing the option, but just take advantage of getting SS early (by a spousal claim at age 66) and then file as normal at age 70. I'll still be ahead of the game compared to most...

 

[REWahoo]

I'm not doing the option, but just take advantage of getting SS early (by a spousal claim at age 66) and then file as normal at age 70. I'll still be ahead of the game compared to most...

Assuming you don't get hit by a [-]truck[/-] [-]RV[/-] bus in the interim.

 

[youbet]

Assuming you don't get hit by a [-]truck[/-] [-]RV[/-] bus in the interim.

Yep.... And that's why I went ahead and started mine. DW is ineligible to collect survivor benefits from mine (GPO) and her own is near zero (WEP), so as some longevity protection for her, I'm collecting and banking. If I toss in my cards early, she'd at least have that. OTOH, if I'm "Mr Healthy" at 66 - 70, I'll consider the annuity equivalent of repaying SS. But we'll see...... Leaving the doors open here......

If you can afford to wait, the whole point of starting early seems to be the advantage of knowing what your health is 4 - 8 years beyond 62 and then deciding whether to re-do or not.

To tell ya the truth, I'm not looking forward to making that decision. It's likely not to be clearcut.

 

[W2R]

Assuming you don't get hit by a [-]truck[/-] [-]RV[/-] bus in the interim.

Well, if you get hit by a bus between ages 62 and 70, you're pretty much out of luck anyway, right? Can't take it with you. Sure, you never got to spend the money but you'll never know that.

Of course (being single) I have no idea what impact that might have on spousal SS checks after you are gone. But either way, you're dead and buried which is not my idea of a really great way to spend one's later years.

Wow, this post is ridiculously gloomy!! Sorry 'bout that.

 

[REWahoo]

Well, if you get hit by a bus between ages 62 and 70, you're pretty much out of luck anyway, right?

Of course (being single) I have no idea what impact that might have..

Single or not, the impact would be messy, very messy...

 

[W2R]

Single or not, the impact would be messy, very messy...

Wow, that is even more gloomy and ghoulish than my post! Just be sure to hose off the streets...

 

[donheff]

Yep.... And that's why I went ahead and started mine. DW is ineligible to collect survivor benefits from mine (GPO) and her own is near zero (WEP), so as some longevity protection for her, I'm collecting and banking. If I toss in my cards early, she'd at least have that. OTOH, if I'm "Mr Healthy" at 66 - 70, I'll consider the annuity equivalent of repaying SS. But we'll see...... Leaving the doors open here......

If you can afford to wait, the whole point of starting early seems to be the advantage of knowing what your health is 4 - 8 years beyond 62 and then deciding whether to re-do or not.

To tell ya the truth, I'm not looking forward to making that decision. It's likely not to be clearcut.

This is exactly what DW and I will do when she turns 62 (our situation is reversed). It is not likely that we will need/want the "annuity" at 70 but who knows.

 

[FIRE'd@51]

OAG over at BH's did the "exercise". He had a lot of problems in the repayment, and even getting correct tax forms after he paid everything back at age 70.

Could you provide a link to this?

IIRC, OAG (assuming it's the same OAG) did a payback and restart at age 67-68. He posted extensively about it when he was here at this forum. I don't recall him mentioning any serious problems. In fact, I thought he said it was pretty straightforward.

 

[chinaco]

I read about the do over in a couple of articles over the years. It sounded like it might be a hassle... after the OP story, I am even more convinced.

Our goal is to hedge against longevity (to some degree with SS). Since DW and I both are due SS, we will take one SS at 62 and the other SS at 66.x or 70 (depending on our situation at the time). That way the survivor will have a larger inflation indexed annuity.

 

[rescueme]

Could you provide a link to this?

Bogleheads :: View topic - SSA Form 521/IRS help desperately needed=

Currently the last entry on the post (as related to tax form situation). As far as all the other posts related to his "hassles", they are spread out and go back a couple of years. If he talked about it here, I'm sure it's the same situation.

As far as the comment on taking SS early (incase you die), I've commented on this before, but I really don't care if I die before I'm "paid back" what I put in. Money is for the living - not the dead.

Our plan not only ensures the maximum SS benefit, but it also reduces the amount of excessive RMD withdrawls after age 70.5 thus reducing taxes, since we're doing a drawdown of our TIRA's in our ER. In addition, it maximizes the amount of benefit to my wife, assuming I pass first (we're the same age).

I ran the analysis using Fidelity's RIP forecast, which gives you the breakdown year by year concerning withdrawl %, tax impact, RMD's, etc. and the breakdown of our various investments.

Using the parameters of all other retirement income/expenses and only changing the age of starting SS (a mix of different dates for both of us), showed that the best financial sense for our situation is for my DW to take it at age 66, me to file for 50% spousal benefits at the same time, and then take my SS at age 70, both for the higher benefit and the benefit to my wife when I pass.

Hey, we all have our own decisions to make. This is ours ...

 

[Achiever51]

My dad took SS at 62.5 years and did a "do-over" at age 66. As I recall, the paperwork consisted of one form, followed by a check from his account for the actual amount he received during the years he was relinquishing. His biggest problem was getting through to the right person at SS (i.e., most of the clerks at the local office had never heard of the do-over.) BTW, he's 91 now and told me the other day that he was glad he did the do-over.

 

[Orchidflower]

Awhile ago there was great discussion about paying back the collected SS funds a couple months before 70 and re-starting your SS benefits. I just returned from the SS office this morning; and, when I asked if and when this will come into effect, nobody seemed to have any knowledge of this. In fact, the gals there at the desk--who deal with questions like this every day--say they haven't heard a thing about it and seemed shocked.
I asked how would I even know if the law was changed regarding paying back and re-starting at 70 being no longer allowed, and I was told it would be on the socialsecurity.gov website.
However, they, also, said that--even IF it became law--it would take a good year to go into effect. So, for now, I am at the "What? Me worry?" stage--unless someone on this board has better information than I got...other than the guy at the corner gas and grocery telling them.

Here's the link to Social Security:
Social Security Online - The Official Website of the U.S. Social Security Administration

Obviously, I gave the wrong impression of the gals at the SS office: yes, they did know about the law and no, they had not heard anything at all about the law changing. I gather there are people in this area doing the re-set thing here, so they did know what I was talking about. The gals were shocked to hear that the law would be changing as they had never had a note or memo or anything about that. Sorry to have given an incorrect impression about the matter (note to self: write clearer as people cannot read my mind).

Does anyone know what we should put into the "search" column here to find the old links to posts on this issue? Not sure "social security" is going to find it quickly if you get my drift.

From reading these posts, looks like the form is Form 521?

 

[Orchidflower]

Well, I had to go all the way back to July, 2009, and work my way up to January, 2010, where I found it:

http://www.early-retirement.org/for...payback-system-may-be-discontinued-47985.html

And here we are: Form 521...BINGO!!!

http://www.ssa.gov/online/ssa-521.pdf



Yeah!!!!!