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Social Security Payback Option Eliminated

More changes to Social Security
More changes to Social Security

Emily Brandon of U.S. News & World Report is reporting that retirees will no longer be able to get an interest-free loan from the Social Security Trust Fund, the Social Security Administration announced yesterday. Effective Dec. 8, retirees will not be able to pay back benefits already received in exchange for higher Social Security payments going forward. What does this mean for you? Little-known provisions of Social Security law previously allowed individuals to begin payments at age 62, pay back all the benefits received at age 70 without interest, and then reclaim at a higher rate due to delayed claiming. However, this claiming strategy, which is employed primarily by affluent households, costs the federal government and Social Security Trust Fund money. If you're affluent, this may mean something to you. If not, you probably weren't aware that you could do this anyway, which is the sad part.


Another way that Social Security beneficiaries were previously allowed to boost their checks was by suspending benefits already received retroactively, repaying the amount received, and then getting higher checks going forward. The new rules allow retirees to voluntarily suspend benefits only for months in which they did not receive payments. Beneficiaries may also suspend future payments beginning the month after the request is made. We get it — affluent folks can no longer have these options, since they get the tax cuts.

These changes will be applied only to old-age benefit recipients, not survivor and disability beneficiaries. Don't like the changes? You can offer comments until February 2011, when the agency will publish a final rule that addresses relevant comments. Gee, thanks.


Read more at Yahoo News.

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