This is a new one on me. I always thought that the start date for Social Security was final. Once you made your choice of a start date you were locked into that decision forever.
Apparently, that is not the case. Just like kids playing a game or weekend golfers, you do have the opportunity for a do-over. During the past year, 71 people restarted their Social Security benefits clock. It may have cost them a worthy sum, but they were actually able to do it.
Don’t rush out to your Social Security Office just yet. The nasty fly in the ointment is that you first have to write a check out to Social Security for the total of all of the benefits you have received to date. No wonder only 71 people made the choice.
But it may be worth going through the exercise just to see what would be involved. Here is the drill.
- Go through your records and calculate the total amount you have received from Social Security to date. That amount includes all benefits, including those deducted for Medicare.
- Calculate how much additional you would receive from Social Security if your start date was two or three months from now. The Social Security web site does not disclose specific rates but does explain how rates are adjusted for different start dates.
- For comparison purposes, calculate what the relative interest rate would be to achieve a similar return on that total amount of money you would have to pay. If it seems to make sense for you, then the next steps apply.
- Download Form 521, Request for Withdrawal of Application, from the Social Security web site and fill it out.
- Visit your local Social Security office in person. Their web site also will give you the location of the local office.
- Social Security will process your request, and -
- your benefits will stop almost immediately,
- you will receive a statement from them specifying the amount you will have to repay,
- you will wait 2-3 months for the higher benefits to start being paid.
Obviously, this deal is not for many people. However, if you have some cash available, it may be worth reviewing the option. There is an good article in Kiplinger’s Personal Finance that describes the process in greater detail. It may not be a deal for many people, but it is nice to know it’s possible.
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