Posted on 09 December 2010
By Mark Miller
The Social Security Administration (SSA) clamped down on a complex–but lucrative–loophole that allowed beneficiaries to increase their payments by thousands of dollars annually through a “re-setting” of the date when benefits begin.
Most Social Security recipients come out ahead in the long run by waiting until their full retirement age to file for benefits, rather than filing earl at age 62. But a little known “do-over” feature of the program made it possible to reverse an early filing decision and re-file at a later age. The catch is that you must repay all the gross benefits you’ve received (before deductions for Medicare Part B premiums), which can easily total $100,000 or more for the average recipient.
Now, the SSA has published new rules sharply limiting do-overs. Filings must be made within 12 months of the initial application for benefits, and beneficiaries are limited to one lifetime withdrawal from the program.