Did you know that it's possible to increase your monthly retirement cash from Social Security by as much as $1,033 per month? No? Well, don't feel alone.
There are over 32 million retired Americans.
Guess how many took advantage of this amazing opportunity last year? 10 million? 1 million? 100 thousand? 10 thousand? Surely one thousand did.
How about 230? That's two hundred thirty people out of over 32 million.
That's less than 0.
0007%.
"How is that possible?" you ask.
Well, to begin with, more than 99% don't even know about it.
The Social Security Administration (SSA) doesn't publicize this opportunity.
SSA representatives are simply not authorized to recommend retirement strategies or to give you any kind of personalized advice.
I'm on Social Security myself.
I had never heard of this either.
I'm not a Social Security expert.
Nor am I a lawyer, a CPA, or a financial advisor.
I am, however, an avid reader of business and financial magazines and the like.
So, I thought I would research this subject and share my findings with anyone who might be interested so they could follow up with the SSA to see if they can qualify.
Here are the details gleaned from my readings.
The Basics: Your yearly benefit increases by about 8 percent for every year you postpone taking your SS after age 62.
That's on top of the SSA adjustment each year for cost of living.
Knowing this, it's easy to see why the general advice is to wait to collect--if you are financially able to.
If you have already begun taking your benefits, you can file a Form 521 (Request for Withdrawal of Application) and pay back the benefits you have already received-without interest.
You'll then be able to reapply and receive larger benefits as if you had waited all along.
Time It Right: According to Pam Villarreal, a policy analyst with the National Center of Policy Analysis, "There is kind of an optimal age.
If you take early-retirement benefits at 62 and then paid them back at 70, you're going to increase your living standard far more than if you took retirement benefits at 62 and paid them back at 76, because your life expectancy is going to be shorter.
" Also, the longer you wait to file the 521, the more you'll pay back and the less time you'll have to enjoy the increased benefits.
Aim for age 70, if you can.
Plan Ahead: The key to making this work is having the money to pay back when the time comes.
Some people see this as a strategy.
You take the money starting at 62, stash it where it'll earn interest for the next seven or eight years, then pay it back.
It's an interest-free loan from the government made even more attractive because the amount you pay back isn't even adjusted for inflation.
But, waste the money or lose it in a risky investment,and you're stuck with the lower benefit for life.
Weigh the Risks: The main risk, says Dr.
Laurence Kotlikoff, economics professor at Boston University and co-author of Spend 'Til the End, is that the government will close this loophole, and you'll have already taken the lower benefit.
However, he says that as of now, he hasn't seen any indication of that occurring; in fact, the SSA seems very willing to accept the Form 521.
Go to http://www.
ssa.
gov/.
Under Forms and Publications find Form Number521 "Request for Withdrawal of Application".
Save to your computer.
It's that easy.
Incredibly, Form 521 has only one page to fill out to potentially increase you monthly retirement cash from Social Security by up to $1,033.
Of course, if more retirees started taking advantage of this loop hole, the government might change the law.
Otherwise, it would cost billions to meet all the requests.
However, once you're in, you're in for life.
Estimates are that over 10 million U.
S.
retirees could benefit.
Another risk is not living as long as you expect, in which case you will pay back the money only to receive the higher benefit for just a year or two in return.
These are both scenarios to consider carefully.
Running the numbers before filing can help, particularly if you have to decide between taking spousal benefits and your own.
The SSA has calculators at www.
ssa.
gov/planners/calculators.
htm that can help.
Hopefully you've found this informative and helpful.
You're now more knowledgeable than most SSA employees.
Best wishes in your retirement whatever actions you decide to take.
There are over 32 million retired Americans.
Guess how many took advantage of this amazing opportunity last year? 10 million? 1 million? 100 thousand? 10 thousand? Surely one thousand did.
How about 230? That's two hundred thirty people out of over 32 million.
That's less than 0.
0007%.
"How is that possible?" you ask.
Well, to begin with, more than 99% don't even know about it.
The Social Security Administration (SSA) doesn't publicize this opportunity.
SSA representatives are simply not authorized to recommend retirement strategies or to give you any kind of personalized advice.
I'm on Social Security myself.
I had never heard of this either.
I'm not a Social Security expert.
Nor am I a lawyer, a CPA, or a financial advisor.
I am, however, an avid reader of business and financial magazines and the like.
So, I thought I would research this subject and share my findings with anyone who might be interested so they could follow up with the SSA to see if they can qualify.
Here are the details gleaned from my readings.
The Basics: Your yearly benefit increases by about 8 percent for every year you postpone taking your SS after age 62.
That's on top of the SSA adjustment each year for cost of living.
Knowing this, it's easy to see why the general advice is to wait to collect--if you are financially able to.
If you have already begun taking your benefits, you can file a Form 521 (Request for Withdrawal of Application) and pay back the benefits you have already received-without interest.
You'll then be able to reapply and receive larger benefits as if you had waited all along.
Time It Right: According to Pam Villarreal, a policy analyst with the National Center of Policy Analysis, "There is kind of an optimal age.
If you take early-retirement benefits at 62 and then paid them back at 70, you're going to increase your living standard far more than if you took retirement benefits at 62 and paid them back at 76, because your life expectancy is going to be shorter.
" Also, the longer you wait to file the 521, the more you'll pay back and the less time you'll have to enjoy the increased benefits.
Aim for age 70, if you can.
Plan Ahead: The key to making this work is having the money to pay back when the time comes.
Some people see this as a strategy.
You take the money starting at 62, stash it where it'll earn interest for the next seven or eight years, then pay it back.
It's an interest-free loan from the government made even more attractive because the amount you pay back isn't even adjusted for inflation.
But, waste the money or lose it in a risky investment,and you're stuck with the lower benefit for life.
Weigh the Risks: The main risk, says Dr.
Laurence Kotlikoff, economics professor at Boston University and co-author of Spend 'Til the End, is that the government will close this loophole, and you'll have already taken the lower benefit.
However, he says that as of now, he hasn't seen any indication of that occurring; in fact, the SSA seems very willing to accept the Form 521.
Go to http://www.
ssa.
gov/.
Under Forms and Publications find Form Number521 "Request for Withdrawal of Application".
Save to your computer.
It's that easy.
Incredibly, Form 521 has only one page to fill out to potentially increase you monthly retirement cash from Social Security by up to $1,033.
Of course, if more retirees started taking advantage of this loop hole, the government might change the law.
Otherwise, it would cost billions to meet all the requests.
However, once you're in, you're in for life.
Estimates are that over 10 million U.
S.
retirees could benefit.
Another risk is not living as long as you expect, in which case you will pay back the money only to receive the higher benefit for just a year or two in return.
These are both scenarios to consider carefully.
Running the numbers before filing can help, particularly if you have to decide between taking spousal benefits and your own.
The SSA has calculators at www.
ssa.
gov/planners/calculators.
htm that can help.
Hopefully you've found this informative and helpful.
You're now more knowledgeable than most SSA employees.
Best wishes in your retirement whatever actions you decide to take.