Posted on 10 September 2010
By Mark Miller
The Social Security Administration is pushing to tighten a loophole that allows beneficiaries to increase their payments by thousands of dollars annually through a “resetting” of the date when benefits begin.
Under Social Security’s rules, workers can file for benefits as early as age 62, but they receive higher monthly payments when they wait until their full retirement age – currently 66. About half of Americans file at 62, but in most cases it’s a costly mistake.
That is, unless you take back your decision. Under a little known – and little-used – feature of Social Security rules, it’s 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.
But this option could be sharply curtailed soon. SSA is proposing to limit benefit withdrawals to 12 months after an application is first submitted. The new rules also would allow only one withdrawal per lifetime.